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Debt Assumption Agreement Template for Netherlands

A Debt Assumption Agreement under Dutch law is a tripartite agreement where one party (the assuming party) takes over the debt obligations of another party (the original debtor) with the explicit consent of the creditor. This document is governed by the Dutch Civil Code (Burgerlijk Wetboek), particularly Articles 6:155-6:158, which set out the requirements for valid debt assumption, including mandatory creditor consent. The agreement details the terms of the assumption, including the debt amount, payment terms, conditions precedent, and any security arrangements, while ensuring compliance with Dutch legal requirements for the transfer of obligations.

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What is a Debt Assumption Agreement?

The Debt Assumption Agreement is a crucial document used in various financial and corporate transactions where one party wishes to take over the debt obligations of another. This agreement, governed by Dutch law, is commonly used in corporate restructurings, acquisitions, or group reorganizations where debt obligations need to be transferred between entities. The document must comply with the Dutch Civil Code, particularly Articles 6:155-6:158, which require explicit creditor consent for the assumption to be valid. It includes detailed provisions about the debt being assumed, payment terms, conditions precedent, and any security arrangements. The agreement serves to document the three-way relationship between the original debtor, the assuming party, and the creditor, ensuring clarity of obligations and legal certainty for all parties involved.

What sections should be included in a Debt Assumption Agreement?

1. Parties: Identification of the original debtor, the assuming party (new debtor), and the creditor

2. Background: Context of the original debt and the reasons for the assumption

3. Definitions: Definitions of key terms used throughout the agreement

4. Details of the Original Debt: Comprehensive description of the debt being assumed, including amount, interest rates, and payment terms

5. Assumption of Debt: Core provisions regarding the transfer of debt obligations from original debtor to assuming party

6. Creditor's Consent: Express consent of the creditor to the debt assumption, as required by Dutch law

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

8. Effective Date and Conditions Precedent: When the assumption takes effect and any conditions that must be met

9. Payment Terms: Specifics of how and when payments will be made by the assuming party

10. Governing Law and Jurisdiction: Confirmation of Dutch law as governing law and jurisdiction for disputes

11. Notices: How formal communications between parties should be made

12. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments

What sections are optional to include in a Debt Assumption Agreement?

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

2. Original Debtor Release: Used when the original debtor is to be fully released from all obligations

3. Partial Assumption Provisions: Needed when only part of the debt is being assumed

4. Tax Provisions: Required when there are specific tax implications that need to be addressed

5. Currency Conversion: Necessary when the assumed debt involves multiple currencies

6. Step-In Rights: Used when the creditor needs rights to require direct performance from the original debtor in specific circumstances

7. Third Party Consents: Required when other parties' consents are needed beyond the main parties

What schedules should be included in a Debt Assumption Agreement?

1. Schedule 1 - Original Debt Documentation: Copies or details of the original debt agreements and related documents

2. Schedule 2 - Payment Schedule: Detailed schedule of payment dates, amounts, and any variable elements

3. Schedule 3 - Security Details: Details of any security arrangements or collateral associated with the debt

4. Schedule 4 - Conditions Precedent: List of all conditions that must be satisfied before the assumption becomes effective

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

6. Appendix B - Calculation Methods: Details of any specific calculation methods for interest, penalties, or other variable amounts

Authors

Alex Denne

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

Jurisdiction

Netherlands

Publisher

Ƶ

Cost

Free to use

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