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Deed Of Subordination Template for Indonesia

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Key Requirements PROMPT example:

Deed Of Subordination

"I need a Deed of Subordination under Indonesian law for a manufacturing company's new USD 5M senior facility from Bank Central Asia, where the director's existing shareholder loan of USD 1M needs to be subordinated to the bank debt."

Document background
The Deed of Subordination is a crucial document in Indonesian financing arrangements where multiple creditors are involved with different levels of priority. It becomes necessary in scenarios such as corporate restructuring, project financing, or when new debt is being introduced alongside existing facilities. The document ensures that junior creditors' rights to payment are subordinated to those of senior creditors, providing clarity and certainty in the creditor hierarchy. Under Indonesian law, such arrangements must comply with the Civil Code (KUH Perdata) and relevant OJK regulations, particularly in regulated sectors. The deed typically includes detailed provisions on payment restrictions, turnover obligations, and enforcement rights, and is especially important in the context of Indonesian bankruptcy proceedings where creditor ranking is crucial.
Suggested Sections

1. Parties: Identifies all parties to the deed including the Senior Creditor(s), Subordinated Creditor(s), and the Debtor

2. Background: Sets out the context of the existing debts and the purpose of the subordination arrangement

3. Definitions and Interpretation: Defines key terms including Senior Debt, Subordinated Debt, Enforcement Event, and other relevant terms

4. Subordination: Core provision establishing the subordination of the specified debt and its ranking

5. Undertakings by the Subordinated Creditor: Key promises by the subordinated creditor regarding their debt and actions they can/cannot take

6. Restrictions on Payment: Details when payments on subordinated debt are prohibited or permitted

7. Turnover of Receipts: Provisions requiring subordinated creditors to turn over any unauthorized payments to senior creditors

8. Protection of Subordination: Provisions ensuring the subordination remains effective in various scenarios including insolvency

9. Power of Attorney: Appointment of the Senior Creditor as attorney to enforce the subordination provisions if necessary

10. Duration: Period for which the subordination arrangements remain in effect

11. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law, etc.

Optional Sections

1. Security Provisions: Required when the subordination involves secured debts, dealing with the ranking of security interests

2. Permitted Payments: Used when certain payments to subordinated creditors are allowed under specific conditions

3. Subordinated Creditor Representations: Additional representations needed for complex subordination arrangements or where the subordinated creditor has special status

4. Further Subordination: Required when there are multiple tiers of subordination or the possibility of future subordinated debt

5. Intercreditor Provisions: Needed when there are multiple creditors at the same level requiring coordination

6. Assignment and Transfer: Detailed provisions needed when transfers of the subordinated or senior debt are contemplated

7. Standstill Provisions: Required when subordinated creditors need specific restrictions on enforcement actions

Suggested Schedules

1. Schedule 1 - Details of Senior Debt: Lists all senior debt facilities, amounts, and key terms

2. Schedule 2 - Details of Subordinated Debt: Lists all subordinated debt facilities, amounts, and key terms

3. Schedule 3 - Form of Accession Deed: Template for new parties to accede to the subordination arrangement

4. Schedule 4 - Form of Subordination Notice: Template for formal notices regarding the subordination arrangement

5. Schedule 5 - Security Details: Details of any security interests affected by the subordination

6. Appendix A - Payment Conditions: Detailed conditions under which payments on subordinated debt are permitted

7. Appendix B - Enforcement Procedures: Procedures for enforcement of rights under the deed

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

















































Clauses






























Relevant Industries

Banking & Financial Services

Real Estate & Construction

Infrastructure

Manufacturing

Mining & Resources

Energy

Telecommunications

Healthcare

Retail & Consumer

Technology

Transportation & Logistics

Relevant Teams

Legal

Finance

Treasury

Corporate Finance

Risk Management

Compliance

Credit

Corporate Secretariat

Investment

Restructuring

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Debt Finance Manager

Credit Risk Manager

Restructuring Officer

Investment Manager

Compliance Officer

Company Secretary

Senior Finance Manager

Banking Relationship Manager

Corporate Finance Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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