Debtor In Possession Loan Agreement Template for Singapore

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Key Requirements PROMPT example:

Debtor In Possession Loan Agreement

"Need a Debtor In Possession Loan Agreement for a Singapore manufacturing company seeking USD 50M in rescue financing, with multiple lenders involved and cross-border assets in Malaysia and Indonesia that need to be included as security."

Document background
A Debtor In Possession Loan Agreement is utilized when a company in financial distress requires new financing during insolvency proceedings in Singapore. This document, governed by Singapore law, particularly the IRDA 2018, establishes the terms under which a lender provides rescue financing to the distressed company. The agreement typically includes provisions for super-priority status, security arrangements, operational controls, and monitoring mechanisms. It's specifically designed to balance the interests of new lenders providing rescue financing with existing creditors' rights, while enabling the debtor company to continue operations during restructuring.
Suggested Sections

1. Parties: Identification of lender(s) and borrower(s), including registration details

2. Background: Context of the DIP financing, including insolvency proceedings status

3. Definitions: Key terms used throughout the agreement

4. Facility Details: Loan amount, purpose, and drawdown conditions

5. Security and Priority: Super-priority status and security arrangements

6. Conditions Precedent: Requirements before loan effectiveness

7. Representations and Warranties: Borrower's statements of fact and assurances

8. Covenants: Ongoing obligations of the borrower

9. Events of Default: Circumstances that trigger default and remedies

10. Payment Terms: Interest rates, repayment schedule, and fees

11. Governing Law and Jurisdiction: Applicable law and dispute resolution provisions

Optional Sections

1. Intercreditor Provisions: Required when multiple creditors are involved to establish priority and rights between different classes of creditors

2. Cross-Border Provisions: Provisions dealing with international aspects of the financing, including recognition of foreign proceedings

3. Carve-out Provisions: Specific exceptions to the super-priority status and provisions for protected creditors

4. Insurance: Requirements for insurance coverage of assets and business

5. Voting Rights: Provisions regarding creditor voting rights in restructuring proceedings

Suggested Schedules

1. Form of Drawdown Notice: Standard format for requesting loan disbursements

2. Security Documents: Details of collateral and security arrangements

3. Fee Schedule: Breakdown of all applicable fees and charges

4. Court Orders: Copies of relevant insolvency proceedings orders

5. Budget: Approved operating budget during DIP period

6. Existing Indebtedness: Schedule of pre-existing debts and their status

7. Form of Compliance Certificate: Template for periodic compliance reporting

Authors

Alex Denne

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

Relevant legal definitions
Clauses
Industries

Companies Act 1967: Primary legislation governing corporate entities in Singapore, including provisions for schemes of arrangement under Section 211E relevant to DIP financing

Insolvency, Restructuring and Dissolution Act 2018 (IRDA): Key legislation containing Section 67 for super-priority rescue financing and Section 94 for judicial management provisions in DIP scenarios

Banking Act 1970: Regulates banking institutions and their lending activities in Singapore, including requirements for institutional lenders in DIP financing

Securities and Futures Act 2001: Governs securities and financial instruments, relevant for any securitization aspects of DIP financing

Moneylenders Act 2008: Regulates money lending activities in Singapore, may be relevant depending on the nature of the DIP lender

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore affecting lending practices and financial institutions

Singapore Code of Corporate Governance: Guidelines for corporate governance practices that may affect DIP loan arrangements and company management during restructuring

Personal Data Protection Act 2012: Governs the collection, use, and disclosure of personal data if involved in the loan documentation

UNCITRAL Model Law on Cross-Border Insolvency: International framework for cross-border insolvency proceedings, relevant for DIP loans with international elements

Security Registration Requirements: Requirements for registering security interests and cross-border secured transactions under Singapore law

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,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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