SUBORDINATED LOAN AGREEMENT

This Subordinated Loan Agreement (hereinafter referred to as the “Agreement”) is made on [INSERT DATE ON WHICH AGREEMENT COMES INTO FORCE] (hereinafter referred to as the “Effective Date”) between:

[INSERT NAME OF THE LENDER], having registered office at [INSERT ADDRESS OF THE LENDER] (hereinafter referred to as the “Lender” which expression shall, unless repugnant to the context or meaning thereof, means and includes its legal representatives, executors, administrators and permitted assigns); and 

[INSERT NAME OF THE BORROWER], having registered office at [INSERT ADDRESS OF THE BORROWER] (hereinafter referred to as the “Borrower” which expression shall, unless repugnant to the context or meaning thereof, means and includes its legal representatives, executors, administrators and permitted assigns).

The “Lender” and the “Borrower” together shall be referred to as “Parties” and individually as a “Party”.

WHEREAS

1. The Lender is engaged in the business of [INSERT NATURE OF BUSINESS] and agreed to provide financial assistance to the borrower.
2. The Borrower needed the financial assistance for the Purpose of [INSERT PURPOSE OF THE BUSINESS].
3. The Borrower wishes to set forth the loan as subordinated loan, and lender is aware of the subordinated nature of this loan relative to senior indebtedness.
4. The Lender and Borrower mutually agree to the terms and conditions outlined in this Agreement, which governs the working relationship between the parties.
5. The parties are duly authorized and have the capacity to enter into this agreement.
6. Both the parties affirm to understand the provisions contained herein and in case either party requires clarification as to one or more provisions, either party has had the right to seek clarifications or sought legal guidance.

NOW, THEREFORE, in consideration of the mutual promises contained herein and intending to, be legally bound, the Parties have agreed as follows:

1. DEFINITIONS
   1. ”Borrower” shall mean an individual or entity who received the money from the lender.
   2. “Lender” shall mean an individual or entity providing the loan as specified in this Agreement.
   3. “Loan Amount” refers to the principal amount lent by the lender to the borrower for the purpose stated hereof.
   4. “Interest Rate” shall mean to the fixed rate of interest on the Loan Amount.
   5. “Subordinated loan” means a qualifying subordinated loan on terms approved by the Lender and signed by the parties thereto.
   6. “Insolvency” shall mean the beginning of business liquidation, bankruptcy and winding up where borrower is unable to meet its financial obligations.
   7. “Confidential Information" means any non-public information, data, documentation, trade secrets, know-how, or any other information disclosed by one party to the other party in connection with this agreement , whether in written, oral, electronic, or any other form, and identified as confidential or which the Parties should reasonably understand to be confidential.
2. LOAN AMOUNT
   1. The Lender agreed to lend the Principal amount to the borrower for a total period of [INSERT LOAN PERIOD].
   2. The Borrower hereby acknowledges its indebtedness to the Lender in the sum of [INSERT THE LOAN AMOUNT] as an unsecured loan and subject to the terms and conditions of this Agreement.
3. TERM
   1. This Agreement shall commence on the effective date of [INSERT DATE OF AGREEMENT] and continue for [INSERT TERM PERIOD OF AGREEMENT IN DAYS/MONTHS/YEARS] as agreed by the parties. The Agreement may be terminated earlier in accordance with the termination provisions set forth herein, including termination upon mutual written consent or any other conditions specified within the Agreement that allow for early termination.
4. OBLIGATIONS OF THE BORROWER
   1. The Borrower agrees to maintain the priority and subordination of the loan as outlined in this agreement.
   2. The Borrower shall promptly inform the Lender in writing of any material changes in the Borrower's financial condition, contact information, or any other circumstances that may affect the Borrower's ability to fulfill the obligations under this Agreement.
   3. The Borrower shall comply with all applicable laws, regulations, and governmental requirements related to the loan transaction, including but not limited to tax laws and reporting obligations.
   4. The Borrower shall maintain accurate records related to the loan transaction, including financial statements, receipts, and any other documentation as requested by the Lender. The Lender reserves the right to inspect and audit such records upon reasonable notice.
5. OBLIGATIONS OF THE LENDER
   1. The Lender shall disburse the Loan Amount to the Borrower in accordance with the terms specified in this Agreement and within the agreed timeframe.
   2. The Lender expressly acknowledges and agrees to the subordinated status of the loan as detailed under the "Subordination" clause and shall not demand repayment in priority to any senior indebtedness of the Borrower.
   3. The Lender shall treat all information received from the Borrower in connection with this Agreement, including financial and business information, as Confidential Information in accordance with the confidentiality provisions outlined herein.
   4. The Lender shall not unreasonably interfere in the operational decisions or business activities of the Borrower, except to the extent necessary to enforce the terms of this Agreement or protect its interests under law.
   5. The Lender shall promptly notify the Borrower of any change in its contact information or legal status that may affect this Agreement.
   6. The Lender shall comply with all applicable laws and regulations relating to the loan transaction, including those concerning interest rates, taxation, and financial disclosures.
6. REPAYMENT
   1. The borrower agreed to repay the loan amount on [INSERT DATE ON WHICH THE BORROWER AGREE TO PAY BACK THE LOAN] along with interest and charges if any due on the borrower on a [INSERT PERIOD; MONTHLY OR QUARTERLY] basis.
   2. Subject to the terms of indebtedness, the lender may send a written notice within [INSERT TIME PERIOD] to the borrower for the repayment of loan.
   3. The borrower may prepay the loan amount before the repayment date to the lender, with interest and all the charges accordingly.
7. REPRESENTATION AND WARRANTIES
   1. Each Party hereby represents and warrants to the other Party that, as of the Effective Date and throughout the term of this Agreement. Each Party has full legal power, authority, and capacity to enter into, execute, and deliver this Agreement and to perform its obligations hereunder. The execution and performance of this Agreement has been duly authorized by all necessary corporate or organizational actions.
   2. The execution and delivery of this Agreement, and the performance of its obligations hereunder, do not and will not conflict with or result in a breach of any terms or provisions of, or constitute a default under, any agreement, contract, instrument, law, regulation, or order to which the Party is a party or by which it is bound.
   3. This Agreement constitutes a legal, valid, and binding obligation of each Party, enforceable against it in accordance with its terms, subject to applicable laws relating to bankruptcy, insolvency, and creditor rights generally.
   4. Each Party represents that there are no pending or, to its knowledge, threatened actions, suits, investigations, or proceedings before any court or governmental authority that would affect its ability to perform its obligations under this Agreement.
   5. The Borrower represents and warrants that, as of the date of this Agreement, it is not insolvent and is able to meet its obligations as they fall due.
   6. The Lender represents and acknowledges that it fully understands and accepts the subordinated nature of the loan and the implications thereof, including the risks associated with such subordination.
   7. Each Party warrants that all information, documents, and representations provided to the other Party in connection with this Agreement are true, accurate, and complete in all material respects.
8. DEFAULT
   1. In the event of any occurrence that may lead to a Default, the Borrower shall notify the Lender immediately, providing all relevant details and a proposed plan to remedy the Default. The Borrower will take all the necessary steps to repay the loan amount as per the agreed terms and conditions.
9. SUBORDINATION
   1. The Parties acknowledge and agree that this loan, including both the principal amount and any accrued interest, is expressly subordinated to all senior indebtedness and obligations of the Borrower, whether existing at the time of this Agreement or incurred in the future.
   2. In the event of the Borrower's insolvency, bankruptcy, or liquidation, the lender under this Subordinated Loan Agreement shall not have the right to repayment until all senior creditors, including secured creditors, bondholders, or other parties with superior claims, have received full payment and satisfaction of their claims.
   3. The Borrower shall not take any action that would impair the subordinated status of this loan or otherwise affect the relative priorities of this loan and senior indebtedness.
   4. The Parties agree that this subordination clause is binding on the Borrower and the Lender, and their respective successors, assigns, and legal representatives.
   5. This subordination clause shall remain in full force and effect even if the senior indebtedness is refinanced, extended, or otherwise modified, provided that such modifications do not prejudice the rights of the lender under this Agreement.
10. CONFIDENTIALITY
    1. Confidential Information shall not include any information that: (i) is or becomes generally known to the public without either Party’s breach of any obligation owed to the other Party; (ii) was independently developed by a Party without other Party's breach of any obligation owed to that Party; or (iii) is received from a third party who obtained such Confidential Information without any third party's breach of any obligation owed to the Party.
    2. During and after the term of this Agreement, Parties will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of Confidential Information, and Parties will not (i) use the Confidential Information for any purpose whatsoever other than as necessary for the performance of the Services on behalf of the other Party, or (ii)  disclose the Confidential Information to any third party without the prior written consent of an authorized representative of the other Party.
    3. Parties agrees to protect the confidentiality of the Confidential Information in the same manner that it protects the confidentiality of its own proprietary and confidential information of like kind, but in no event shall the Parties exercise less than reasonable care in protecting such Confidential Information.
    4. The Parties shall not use any confidential information directly or indirectly to procure a commercial advantage over the other Party or otherwise use any designs, ideas or concepts created by or belonging to the other Party without the express written consent of the other Party.
    5. Upon termination/ expiration whichever is earlier, the Parties shall promptly return or certify the destruction of Confidential Information and all authorized copies thereof.
11. TERMINATION
    1. Either party may terminate this Agreement for material breach on [INSERT THE NUMBER OF DAYS FOR NOTICE OF TERMINATION] days' written notice with opportunity to cure; provided termination will become effective immediately upon such notice, without opportunity to cure, if:
       1. this Agreement provides a specific date or period for performance of the obligation breached; or
       2. the injury caused by the breach is of a type that cannot be materially reduced by the breaching party during the cure period.
    2. Upon expiration or termination of this Agreement, all rights and obligations of the parties shall immediately cease, except for those obligations that have accrued prior to the effective date of termination. Specifically, any outstanding payment obligations, as well as any liabilities or breaches incurred before termination, shall remain fully enforceable. No new rights or obligations shall arise or be enforceable following termination, except for those expressly provided to survive termination within this Agreement.
    3. If this Agreement is terminated in accordance with its termination provisions, it shall become null and void and have no further force or effect, except that the Parties shall continue to be bound by its provisions regarding confidentiality and restrictions on announcements, indemnification, confidentiality, non-solicitation, non-disparagement, notices, miscellaneous matters, and governing law and dispute resolution. Nothing in this clause shall release any Party from any liability for any breach of this Agreement occurring prior to the effective date of such termination.
12. INDEMNIFICATION
    1. Each party (“Indemnifying Party”) shall indemnify, defend, and hold harmless the other party, its affiliates, officers, directors, employees, agents, successors, and assigns (“Indemnified Party”) from and against any and all claims, demands, actions, suits, or proceedings initiated by third parties, as well as any resulting liabilities, damages, losses, costs, and expenses, including reasonable attorneys’ fees, to the extent such claims arise from;
       1. any breach by the Indemnifying Party of its covenants, agreements, or obligations under this Agreement;
       2. any inaccuracy or material misrepresentation in the representations or warranties made by the Indemnifying Party; or
       3. any claim that the use, licensing, or commercialization of intellectual property or proprietary rights by the Indemnifying Party infringes, misappropriates, or otherwise violates the rights of any third party. The Indemnified Party shall provide prompt written notice of any claim for which indemnification is sought, and the Indemnifying Party shall have the right to assume and control the defence with counsel of its choosing, subject to the Indemnified Party’s reasonable approval.
    2. The Indemnified Party shall cooperate in good faith, and while it may participate in the defence at its own expense, the Indemnifying Party shall not settle any claim without the Indemnified Party’s prior written consent if such settlement imposes liability, does not provide a full release, or includes an admission of wrongdoing. Indemnification shall not apply to the extent that the claim arises from the Indemnified Party’s own wilful misconduct, negligence, or material breach of this Agreement.
13. LIMITATION OF LIABILITY
    1. Except as otherwise expressly provided in this Agreement, neither Party shall be liable to the other for any indirect, incidental, special, punitive, or consequential damages (including loss of profits, loss of business opportunities, or reputational harm) arising out of or in connection with this Agreement, regardless of the cause of action and even if advised of the possibility of such damages.
    2. The total liability of either Party for any and all claims arising out of or in connection with this Agreement shall not exceed the total Loan Amount disbursed under this Agreement, except in the event of fraud, willful misconduct, or breach of confidentiality obligations.
    3. Notwithstanding anything to the contrary in this Agreement, nothing in this clause shall limit or exclude either Party’s liability for:
       1. breach of the confidentiality obligations under this Agreement;
       2. indemnification obligations;
       3. gross negligence or willful misconduct;
       4. fraud or fraudulent misrepresentation.
14. DISPUTE RESOLUTION
    1. The Parties shall endeavour to resolve any differences of opinion which may arise between them with respect to the provisions of this Agreement by negotiation between themselves personally or with the assistance of their attorneys and unless in the opinion of any party, acting reasonably, the matter in dispute is of such significant nature to warrant it being addressed otherwise, no party shall commence any public proceedings until the negotiations have failed to produce a resolution. In furtherance of the provisions of this paragraph, all Parties hereby agree to make themselves available on short notice and to negotiate promptly and in good faith, any matter any party may wish to negotiate.
    2. All disputes arising under this agreement shall be governed by and interpreted in accordance with the Arbitration laws of [INSERT COUNTRY/STATE OF ARBITRATION] , without regard to principles of conflict of laws. The parties to this agreement will submit all disputes arising under this Agreement to Arbitration in [INSERT COUNTRY/STATE OF ARBITRATION] before a single arbitrator. The arbitrator shall be selected by mutual agreement of the parties. The venue of Arbitration proceedings shall be [INSERT NAME OF COUNTRY AND CITY WHERE ARBITRATION SHALL BE CONDUCTED] No party to this agreement will challenge the jurisdiction or venue provisions as provided in this section. The decision of the Arbitrator shall be final and binding upon the parties.
15. APPLICABLE LAW
    1. This Agreement shall be governed by and constructed in accordance with the Laws, rules, orders and regulations of [INSERT THE COUNTRY OF APPLICABLE LAWS] .
    2. The Parties shall resolve all disputes in connection with the validity or interpretation of this Agreement, unless otherwise expressly stated in the Agreement, in the following manner: 
       1. By direct negotiations between the Lender and Borrower. 
       2. If negotiations between the parties are unsuccessful, the matter shall be referred to the competent court sitting at [INSERT THE PLACE OF NEGOTIOATIONS IN CASE OF DISPUTE BETWEEN THE PARTIES] which shall have exclusive jurisdiction in all matters arising there from unless otherwise agreed between the Parties in writing.
16. FORCE MAJEURE
    1. Neither party shall be held liable for any failure or delay in performing its obligations under this Agreement if such failure or delay is caused by events beyond the reasonable control of the affected party, including but not limited to acts of God, natural disasters (e.g., floods, earthquakes, hurricanes), war, terrorism, riots, labour strikes, governmental actions, epidemics or pandemics, power outages, or other similar events ("Force Majeure Events").The affected party shall promptly notify the other party in writing of the occurrence of a Force Majeure Event, providing reasonable details of the event, its expected duration, and the steps being taken to mitigate its impact. Failure to provide timely notice may result in the affected party forfeiting its rights under this clause. If a Force Majeure Event continues for a period exceeding [INSERT THE NUMBER OF DAYS CONSTITUTING PERIOD EXCEEDING WHICH, IF THE FORCE MAJEURE CONTINUES, EITHER PARTY MAY TERMINATE THE AGREEMENT] days, either party may terminate this Agreement upon written notice to the other party without further liability, except for obligations accrued prior to the Force Majeure Event.
17. NON DISPARAGEMENT
    1. The Parties agree that neither they nor any of their representatives, agents, employees, or affiliates shall, directly or indirectly, make or publish any statements, comments, or communications, whether orally, in writing, or electronically, including through any channel such as social media platforms, websites, forums, or other public or private means, that disparage, defame, or negatively portray the other Party, its business, products, services, employees, or reputation.
    2. This clause does not prohibit a Party from making truthful statements when required by law, regulation, or valid court order, provided the Party uses reasonable efforts to provide prior notice to the other Party, to the extent permitted by law.
18. NOTICES
    1. Any notice, request, demand, consent or other communication required or permitted under this Agreement shall be in writing and sent either via email on the email address as provided by the parties and shall be considered sent when the email is sent to the correct email address of the party or shall be given by personal delivery (including courier) by certified mail (confirmed by mail) addressed to the party for which it is intended at the address below and shall be deemed to be given on the day of delivery or transmission if within during normal business hours, or, if after business hours, on the next following Business Day, or if mailed by registered or certified mail, on the day which is [INSERT THE APPLICABLE NUMBER OF BUSINESS DAYS WITHIN WHICH THE NOTICE WILL BE DEEMED SERVED] Business Days after such notice is mailed during normal postal conditions.  In the event of a postal disruption, any notice mailed will be deemed received on the seventh (7th) [INSERT THE APPLICABLE NUMBER OF BUSINESS DAYS WITHIN WHICH THE NOTICE WILL BE DEEMED SERVED] Business Day following resumption of regular postal service:
       1. If to the Lender: [INSERT EMAIL ID OR/AND ADDRESS OF THE LENDER]
       2. If to the Borrower: [INSERT EMAIL ID OR/AND ADDRESS OF THE BORROWER]
    2. Either party may change its address/email address for notices and other communications upon notice to the other party in the manner aforesaid.
19. ELECTRONIC SIGNATURES:
    1. This Standard Clause provides that parties may authenticate the agreement with an electronic signature. Each party agrees that the electronic signatures whether digital or encrypted, of the parties included in this Agreement are intended to authenticate this writing and to have the same legal force and effect as manual signatures.
    2. Electronic signature means any electronic sound, symbol or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including email electronic signatures.
20. MISCELLANOUS
    1. Modifications: Except as otherwise provided herein this Agreement shall not be amended or otherwise modified unless the modification or amendment is done in writing, signed and has been mutually agreed by both the parties.
    2. Language: The language of all communications between the parties pursuant to this Agreement, including notices and reports, will be the [INSERT LANGUAGE OF ALL COMMUNICATION].
    3. Severability: If any provision of this Agreement shall, to any extent, be held to be invalid or unenforceable, it shall be deemed to be separate and severable from the remaining provisions of this Agreement, which shall remain in full force and effect and be binding as though the invalid or unenforceable provision had not been included.
    4. Entire agreement: This agreement along with all the Exhibits constitutes the entire understanding and agreement of the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties. This Agreement may be executed in identical duplicate counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument. 
    5. No Waiver: Any failure or delay of any Party hereto in exercising any right or privilege with respect to this Agreement shall not be construed to be a waiver or to affect the validity of any part of the Agreement and shall not retrain any of the Parties to enforce any of the provisions of the Agreement.
    6. Amendments and Assignments:  Any amendments to this Agreement shall be made, only if, both Parties agree upon such amendment in writing. This Agreement shall not be assigned by either party without the express, written consent of the other party.
    7. Headings: The headings upon the various sections are solely for convenience and reference only and shall not affect the scope, meaning, intent or interpretation of the provisions of this Agreement, nor shall such headings otherwise be given any legal effect.
21. INDEPENDENT LEGAL ADVICE
    1. The Parties are advised to seek independent legal counsel before entering into this Agreement. Each Party acknowledges that they have been given a reasonable opportunity to consult with an attorney of their choosing regarding the terms, conditions, and obligations set forth in this Agreement, including any restrictions or commitments imposed herein.
    2. By signing this Agreement, the Parties confirm that they have either sought such independent legal advice or voluntarily chosen to proceed without it. Each Party further represents that they are entering into this Agreement knowingly, voluntarily, and with a full understanding of its provisions. The Parties acknowledge that they are not relying on any statements, promises, or representations made by the other Party or any representative thereof that are not expressly included in this Agreement.
22. DECLARATION
    1. The Parties hereby acknowledge that the terms herein have been read, fully understood, and expressly agreed to, and hereby commit to performing their obligations with due diligence, honesty, and in good faith. The Parties hereby agree to foster a collaborative environment that promotes transparent communication and timely resolution of any issues, thereby ensuring compliance with all applicable laws and industry best practices.

IN WITNESS WHEREOF, the parties, intending to be legally bound, have each executed this agreement as of the effective date.

Signed, sealed and delivered on behalf of Lender

Name: [INSERT THE NAME OF SIGNING AUTHORITY OF LENDER]

Signature:

Date: [INSERT THE DATE ON WHICH LENDER SIGNS THE AGREEMENT]

Signed, sealed and delivered on behalf of Borrower

Name: [INSERT THE NAME OF SIGNING AUTHORITY OF BORROWER]

Signature: 

Date: [INSERT THE DATE ON WHICH BORROWER SIGNS THE AGREEMENT]