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The Loan Note Agreement is a crucial financing document used in the German market when companies seek to raise debt financing through a hybrid instrument that offers more flexibility than traditional bank loans but less complexity than listed bonds. This document type is particularly popular among medium to large-sized companies and is governed by German law, specifically the provisions of the BGB and related financial regulations. It typically details the loan amount, interest calculations, repayment terms, security arrangements (if any), and the rights and obligations of all parties involved. The agreement is designed to be compliant with German legal requirements while maintaining the commercial flexibility needed for modern financing transactions. It's commonly used for both bilateral and syndicated arrangements, and can accommodate both fixed and floating interest rate structures.

1. Parties: Identification of the lender(s), borrower(s), and any other parties such as guarantors or security trustees

2. Background: Context of the loan note issuance and purpose of the financing

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Loan Note Issuance: Terms of issuance, principal amount, and denomination of notes

5. Interest: Interest rate, calculation method, payment dates, and default interest provisions

6. Repayment and Redemption: Terms for repayment of principal, early redemption rights, and mandatory prepayment events

7. Payment Mechanics: Payment procedures, business day conventions, and payment calculations

8. Representations and Warranties: Standard representations and warranties from the borrower

9. Information Undertakings: Borrower's obligations to provide financial and other information

10. General Undertakings: Borrower's positive and negative covenants

11. Events of Default: Circumstances constituting default and consequences

12. Changes to Parties: Transfer and assignment provisions

13. Administration: Administrative provisions including notices and calculations

14. Governing Law and Jurisdiction: Choice of German law and jurisdiction provisions

15. Execution: Signature blocks and execution formalities