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Subordinated Creditors Security Agreement Template for England and Wales

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Key Requirements PROMPT example:

Subordinated Creditors Security Agreement

"I need a Subordinated Creditors Security Agreement to establish security over a commercial property portfolio for a £50M financing transaction, with two tiers of lenders where the junior debt comprises three international banks that need to accede to the agreement by March 2025."

Document background
A Subordinated Creditors Security Agreement is essential in complex financing structures where multiple creditors hold different levels of security over the same assets. This document is particularly relevant in leveraged finance, restructuring scenarios, or when implementing layered capital structures under English and Welsh law. The agreement defines the relationship between different classes of creditors, establishes clear enforcement mechanisms, and provides certainty regarding the ranking of security interests. It includes specific provisions for the creation, perfection, and enforcement of security, while ensuring compliance with English law requirements for valid security interests and subordination arrangements.
Suggested Sections

1. Parties: Identifies all parties to the agreement including the subordinated creditors, senior creditors, and security trustee

2. Background: Sets out the context of the security arrangement and relationships between parties

3. Definitions and Interpretation: Defines key terms and interpretation rules used throughout the agreement

4. Security Interest Creation: Details the creation and nature of the security interests

5. Subordination Provisions: Specifies the terms of subordination and ranking of security interests

6. Representations and Warranties: Sets out parties' representations regarding their capacity and authority

7. Enforcement: Details enforcement rights and procedures

8. Governing Law and Jurisdiction: Specifies applicable law and courts having jurisdiction

Optional Sections

1. Further Assurance: Additional actions parties may need to take to perfect security

2. Power of Attorney: Grants power to execute documents on behalf of other parties

3. Inter-creditor Provisions: Regulates relationships between different classes of creditors

Suggested Schedules

1. Form of Accession Deed: Template for additional parties to join the agreement

2. Secured Assets Schedule: Detailed list of assets subject to security

3. Notice and Acknowledgment Forms: Templates for notifying third parties of security interests

4. Existing Security Interests: Schedule of pre-existing security interests affecting secured assets

Authors

Alex Denne

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

Relevant legal definitions






































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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company charges, registration requirements, financial assistance and corporate benefit provisions. Key for registration and validity of security interests.

Law of Property Act 1925: Fundamental legislation dealing with creation and enforcement of security interests, including requirements for legal mortgages and charges over property.

Insolvency Act 1986: Critical legislation governing priority of creditors in insolvency, rules on preference and transactions at undervalue, and provisions relating to administration and liquidation.

Enterprise Act 2002: Legislation modifying the insolvency regime and providing important provisions regarding the enforcement of security.

Financial Collateral Arrangements (No.2) Regulations 2003: Regulatory framework governing financial collateral and specific enforcement provisions for financial collateral arrangements.

Companies House Registration Requirements: Regulatory requirements for registration of charges and ongoing filing obligations for security interests.

Common Law Principles: Body of case law governing contractual subordination, priority of security interests, and enforcement rights.

Financial Services and Markets Act 2000: Regulatory framework relevant when security arrangements involve regulated activities or financial institutions.

Post-Brexit Retained EU Law: Relevant retained European Union law affecting security interests and cross-border security considerations in England and Wales.

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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