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Debt Assumption Agreement Template for Ireland

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Key Requirements PROMPT example:

Debt Assumption Agreement

"I need a Debt Assumption Agreement for our corporate restructuring where subsidiary company ABC Limited will assume a €2.5M corporate loan from parent company XYZ Holdings, with the transfer to be effective from March 1, 2025, and maintain existing security arrangements with EuroBank as creditor."

Document background
The Debt Assumption Agreement is a crucial legal instrument used when one party wishes to take over the debt obligations of another party under Irish law. This document is commonly utilized in corporate restructuring, mergers and acquisitions, family business transfers, or other situations where debt obligations need to be transferred between parties. The agreement must comply with Irish contract law, financial regulations, and relevant EU directives. It typically includes detailed information about the original debt, terms of assumption, payment schedules, and any security arrangements. The document ensures that all parties' rights and obligations are clearly defined, providing legal certainty for the Original Debtor's release from obligations, the New Debtor's assumption of those obligations, and the Creditor's consent to this arrangement. It's particularly important in commercial transactions where clear documentation of financial obligations and their transfer is essential for risk management and legal compliance.
Suggested Sections

1. Parties: Identifies the Original Debtor, New Debtor (Assuming Party), and Creditor

2. Background: Describes the original debt, the parties' relationships, and the intention to transfer the debt obligations

3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement

4. Assumption of Debt: Core provision detailing the transfer of debt obligations from Original Debtor to New Debtor

5. Effective Date and Conditions Precedent: Specifies when the assumption takes effect and any conditions that must be met

6. Representations and Warranties: Statements of fact and assurances from all parties regarding their capacity and authority

7. Original Debtor's Obligations: Specifies any continuing obligations or releases of the Original Debtor

8. New Debtor's Obligations: Details the assumed obligations and any additional commitments

9. Creditor's Rights and Obligations: Outlines the Creditor's position and any modifications to their rights

10. Payments and Interest: Specifies payment terms, interest rates, and payment mechanisms

11. Events of Default: Lists circumstances constituting default and corresponding remedies

12. Notices: Specifies how formal communications between parties should be made

13. Governing Law and Jurisdiction: Confirms Irish law governance and jurisdiction for disputes

14. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments

Optional Sections

1. Security Arrangements: Required when the assumed debt is secured by collateral or guarantees

2. Regulatory Compliance: Necessary when any party is subject to regulatory oversight or when the debt assumption requires regulatory approval

3. Tax Provisions: Include when there are specific tax implications or arrangements between the parties

4. Currency and Exchange Rate Provisions: Required for cross-border transactions or when the debt is denominated in foreign currency

5. Step-In Rights: Include when certain parties need rights to take over obligations under specific circumstances

6. Third Party Consents: Required when the debt assumption needs approval from parties not directly involved in the agreement

7. Insurance Requirements: Include when specific insurance coverage must be maintained by the New Debtor

8. Assignment and Transfer Restrictions: Include when there are specific limitations on further transfer of the assumed debt

Suggested Schedules

1. Schedule 1 - Details of Original Debt: Comprehensive details of the debt being assumed, including amount, interest rate, and payment terms

2. Schedule 2 - Original Debt Documentation: List and copies of all relevant original debt documents

3. Schedule 3 - Payment Schedule: Detailed schedule of payments to be made by the New Debtor

4. Schedule 4 - Security Details: Description of any security or collateral associated with the debt

5. Schedule 5 - Conditions Precedent Documents: List of all documents required before the assumption becomes effective

6. Appendix A - Form of Notice: Template for required notices under the agreement

7. Appendix B - Completion Documents: List and forms of documents required at completion

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 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

Financial Services

Banking

Corporate Services

Real Estate

Construction

Manufacturing

Healthcare

Retail

Energy

Infrastructure

Transportation

Technology

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Secretariat

Credit Control

Business Development

Commercial

Debt Management

Corporate Strategy

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Risk Manager

Treasury Manager

Financial Controller

Compliance Officer

Company Secretary

Credit Manager

Business Development Director

Restructuring Officer

Commercial Director

Managing Director

Debt Management Officer

Industries








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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