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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."
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.
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
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
Banking & Financial Services
Real Estate & Construction
Infrastructure
Manufacturing
Mining & Resources
Energy
Telecommunications
Healthcare
Retail & Consumer
Technology
Transportation & Logistics
Legal
Finance
Treasury
Corporate Finance
Risk Management
Compliance
Credit
Corporate Secretariat
Investment
Restructuring
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
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