Deed Of Subordination Template for Singapore

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Key Requirements PROMPT example:

Deed Of Subordination

"I need a Deed of Subordination to establish priority between a $10M senior bank loan and a $2M shareholder loan for our Singapore manufacturing company, with the shareholder agreeing to fully subordinate their debt until the bank loan is repaid."

Document background
A Deed of Subordination is commonly used in Singapore when multiple creditors lend to the same debtor and need to establish a clear hierarchy of debt repayment. The deed formally documents the agreement between creditors to subordinate certain debt obligations behind others, typically used in corporate financing, restructuring, or investment scenarios. The document sets out the terms of subordination, including payment restrictions, turnover obligations, and enforcement limitations. Under Singapore law, these deeds are particularly important in insolvency scenarios where creditor priority becomes crucial.
Suggested Sections

1. Parties: Identifies all parties to the deed, including senior and junior creditors, and the debtor

2. Background: Sets out the context of existing debts and reason for subordination

3. Definitions: Defines key terms used throughout the deed including Senior Debt, Subordinated Debt, and Enforcement Action

4. Subordination Provisions: Core terms establishing the ranking of debts and subordination mechanics

5. Undertakings: Commitments by parties regarding the subordinated debt and restrictions on payments

6. Duration: Period for which subordination remains effective and termination provisions

7. Execution: Formal execution blocks for all parties including attestation requirements

Optional Sections

1. Security Provisions: Details of any security arrangements and their priority ranking

2. Turnover Provisions: Provisions for handling unauthorized payments received by junior creditors

3. Further Assurance: Obligation to take additional steps if needed to give effect to the subordination

Suggested Schedules

1. Schedule 1 - Details of Senior Debt: Comprehensive list of senior debt facilities and amounts

2. Schedule 2 - Details of Subordinated Debt: Comprehensive list of subordinated debt facilities and amounts

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

4. Schedule 4 - Notice Provisions: Contact details and methods for serving notices between parties

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
Industries

Companies Act (Chapter 50): Primary legislation governing corporate entities in Singapore, relevant for corporate powers, execution requirements, and registration of corporate documents

Civil Law Act (Chapter 43): Fundamental legislation governing civil law matters in Singapore, including contract formation and enforcement

Conveyancing and Law of Property Act (Chapter 61): Legislation governing property transactions and legal instruments, including requirements for deeds

Registration of Deeds Act (Chapter 269): Legislation governing the registration and recording of deeds in Singapore

Stamp Duties Act: Legislation governing stamp duty implications for legal documents and transactions

Insolvency, Restructuring and Dissolution Act 2018: Legislation governing priority of debts, insolvency proceedings, and creditor rights

Common Law Principles - Subordination: Legal principles established through case law regarding the creation and enforcement of subordination agreements

Contractual Capacity Rules: Legal principles governing who can enter into binding contracts and under what circumstances

Consideration Doctrine: Legal requirement for valid consideration in contract formation under Singapore law

Deed Execution Requirements: Specific legal requirements for valid execution of deeds, including witnessing and attestation

MAS Guidelines: Regulatory guidelines from the Monetary Authority of Singapore applicable to financial institutions

Banking Act: Legislation governing banking institutions and their transactions in Singapore

Securities and Futures Act: Legislation governing regulated financial products and securities in Singapore

Attestation Requirements: Legal requirements for proper witnessing and attestation of deeds

Registration Procedures: Procedural requirements for registering deeds with relevant authorities in Singapore

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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