Document background
A Subordinated Promissory Note is typically used in corporate financing scenarios where debt subordination is required, such as in structured financing arrangements, corporate group lending, or investment structures. This document type is particularly relevant when establishing a clear hierarchy of debt within a company's capital structure. Under Dutch law, these notes must comply with specific requirements of the Dutch Civil Code (Burgerlijk Wetboek) and Dutch insolvency laws, particularly regarding the enforceability of subordination provisions. The document captures essential terms including the principal amount, interest provisions, repayment terms, and crucially, the subordination mechanics that determine the note's ranking in relation to other creditors. It's commonly used in both domestic Dutch transactions and cross-border financing arrangements where Dutch law is chosen as the governing law.
