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A Subordinate Loan Agreement is essential in structured financing arrangements where multiple layers of debt exist. This UAE law-governed agreement is typically used when a lender agrees to provide financing on terms that are subordinated to existing or future senior debt obligations. The document becomes particularly relevant in corporate restructuring, acquisition financing, or when companies need to raise additional capital without breaching existing senior loan covenants. It contains detailed provisions regarding payment restrictions, enforcement limitations, and turnover obligations, all tailored to comply with UAE legal requirements, including UAE Federal Law No. 18 of 2017 and Central Bank regulations. The agreement's structure ensures that the subordinated debt ranks behind senior obligations in both payment and security priority, while still providing the subordinated lender with appropriate protections and rights within the constraints of its subordinated status.

1. Parties: Identification of the lender, borrower, and any existing senior creditors

2. Background: Context of the subordinated loan, including reference to any senior debt and the purpose of the subordination

3. Definitions and Interpretation: Key terms including 'Senior Debt', 'Subordinated Debt', 'Enforcement Action', and other relevant definitions

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

5. Subordination: Core provisions establishing the subordinated nature of the debt and its ranking in relation to other debts

6. Conditions Precedent: Prerequisites for drawdown including corporate approvals, security documentation, and legal opinions

7. Drawdown: Procedures and requirements for utilization of the loan

8. Interest: Interest calculation, payment dates, and default interest provisions

9. Repayment: Terms of repayment including any restrictions linked to senior debt

10. Payments: Payment mechanics, currency, and treatment of non-business days

11. Representations and Warranties: Standard and specific warranties regarding borrower's status, capacity, and existing obligations

12. Covenants: Positive and negative undertakings, including restrictions on payments and actions affecting senior debt

13. Events of Default: Circumstances constituting default and consequences, subject to subordination provisions

14. Changes to Parties: Transfer and assignment provisions, typically more restricted than senior facilities

15. Administration: Notice requirements, calculations, and other administrative provisions

16. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction provisions