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The Loan Note Subscription Agreement is a crucial document in Indian corporate finance, used when a company seeks to raise debt financing through the issuance of loan notes to investors. This agreement is particularly relevant in the Indian market where companies often seek alternative financing methods to traditional bank loans. The document must comply with Indian regulatory requirements, including the Companies Act 2013, SEBI regulations, and RBI guidelines. It typically includes detailed terms about the subscription process, interest payments, repayment schedules, security (if any), events of default, and investor protection mechanisms. The agreement may also incorporate provisions for conversion to equity and special rights for subscribers, making it a versatile instrument for both pure debt and hybrid financing structures. It's commonly used for both domestic and foreign investments, subject to relevant FEMA regulations for cross-border transactions.

1. Parties: Identifies the issuer company and the subscriber(s)/investor(s)

2. Background: Explains the context of the loan note issuance and the company's intention to raise funds

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules

4. Subscription and Issue: Details the agreement to subscribe for and issue the loan notes, including the subscription amount and process

5. Conditions Precedent: Lists the conditions that must be satisfied before the subscription obligation becomes binding

6. Completion: Sets out the mechanics and timing for completing the subscription and issuing the loan notes

7. Interest and Repayment: Specifies interest rate, calculation method, payment dates, and repayment terms

8. Company's Representations and Warranties: Contains the issuer's representations and warranties regarding its status, capacity, and business

9. Subscriber's Representations and Warranties: Contains the subscriber's representations and warranties regarding capacity and authority to invest

10. Covenants: Sets out the ongoing obligations of the company, including financial covenants and information rights

11. Events of Default: Lists circumstances that constitute default and the consequences thereof

12. Transferability: Specifies conditions and restrictions on transfer of the loan notes

13. Notices: Details how formal communications between parties should be made

14. Governing Law and Jurisdiction: Specifies that Indian law governs and designates courts for dispute resolution

15. General Provisions: Contains standard boilerplate clauses including amendments, waivers, and severability