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Bank Subordination Agreement
"Need a Bank Subordination Agreement for a manufacturing company with three existing senior lenders (total facility INR 500 crore) and two subordinated lenders (total INR 200 crore), including provisions for potential additional subordinated creditors joining by March 2025."
1. Parties: Identifies all parties to the agreement including the borrower, senior lender(s), and subordinated lender(s)
2. Background: Recitals explaining the existing lending arrangements, purpose of subordination, and context of the agreement
3. Definitions and Interpretation: Defines key terms including Senior Debt, Subordinated Debt, Enforcement Action, and other relevant terms
4. Subordination: Core provisions establishing the subordination of junior debt to senior debt
5. Undertakings by Subordinated Creditors: Commitments from subordinated creditors regarding their claims and actions
6. Payment Restrictions: Restrictions on payments to subordinated creditors and permitted payments
7. Turnover of Receipts: Obligations to turn over any unauthorized payments received by subordinated creditors
8. Enforcement Restrictions: Limitations on enforcement actions by subordinated creditors
9. Application of Proceeds: Order of application of proceeds from enforcement or insolvency
10. Power of Attorney: Appointment of senior creditor as attorney for subordinated creditor in certain circumstances
11. Changes to Parties: Provisions governing transfers and assignments
12. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law
13. Governing Law and Jurisdiction: Specifies Indian law as governing law and jurisdiction for disputes
1. Subordinated Creditor Committee: Required when there are multiple subordinated creditors to coordinate their actions
2. Security Provisions: Needed when specific security interests are involved and require subordination
3. Intercreditor Provisions: Required when there are multiple classes of creditors requiring detailed intercreditor arrangements
4. Standstill Provisions: Additional detailed provisions regarding creditor standstill periods, if required
5. Restructuring Provisions: Needed when agreement contemplates potential debt restructuring scenarios
6. Additional Subordinated Creditor Accession: Required when new subordinated creditors may join the agreement later
7. Representations and Warranties: Additional representations may be needed for complex lending structures
1. Schedule 1 - Form of Accession Deed: Standard form for new parties to accede to the agreement
2. Schedule 2 - Details of Senior Facilities: Detailed list and terms of all senior debt facilities
3. Schedule 3 - Details of Subordinated Debt: Detailed list and terms of all subordinated debt instruments
4. Schedule 4 - Notice Details: Contact details and notice requirements for all parties
5. Schedule 5 - Security Documents: List of all relevant security documents (if applicable)
6. Appendix A - Form of Payment Turnover Notice: Standard form for notification of turnover requirements
7. Appendix B - Form of Subordination Notice: Standard form for subordination notifications to relevant parties
Authors
Additional Subordinated Creditor
Affiliate
Agent
Borrower
Business Day
Default
Discharge Date
Distribution
Distress Event
Enforcement Action
Enforcement Date
Event of Default
Facility Agreement
Finance Documents
Financial Indebtedness
Insolvency Event
Insolvency Proceedings
Liabilities
Loan
Material Adverse Effect
Obligor
Permitted Payment
Principal Documents
Recovery
Secured Parties
Security
Security Documents
Senior Debt
Senior Discharge Date
Senior Event of Default
Senior Finance Documents
Senior Lender
Senior Liabilities
Subordinated Creditor
Subordinated Debt
Subordinated Documents
Subordinated Liabilities
Subordination
Turnover Proceeds
Waterfall Provisions
Definitions
Interpretation
Ranking and Priority
Payment Subordination
Lien Subordination
Payment Restrictions
Turnover Obligations
Standstill
Enforcement
Application of Proceeds
Power of Attorney
Representations and Warranties
Covenants
Events of Default
Assignment and Transfer
Amendments and Waivers
Notices
Accession
Termination
Set-off
Severability
Counterparts
Governing Law
Jurisdiction
Dispute Resolution
Indemnification
Confidentiality
Third Party Rights
Further Assurance
Banking
Financial Services
Corporate Lending
Investment Banking
Infrastructure
Real Estate
Manufacturing
Healthcare
Retail
Technology
Telecommunications
Energy
Legal
Finance
Treasury
Risk Management
Corporate Finance
Credit
Compliance
Banking Operations
Deal Advisory
Transaction Management
Chief Financial Officer
Treasury Manager
Finance Director
Legal Counsel
Banking Relationship Manager
Credit Risk Manager
Corporate Finance Manager
Debt Finance Manager
Restructuring Officer
Company Secretary
Financial Controller
Senior Loan Officer
Syndication Manager
Transaction Manager
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