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CORPORATIONS ACT 2001 No. 50, 2001 - SECT 563C

Debt subordination

(1) Nothing in this Division renders a debt subordination by a creditor of a company unlawful or unenforceable, except so far as the debt subordination would disadvantage any creditor of the company who was not a party to, or otherwise concerned in, the debt subordination. (2) In this section:

"debt subordination" means an agreement or declaration by a creditor of a company, however expressed, to the effect that, in specified circumstances:

a specified debt that the company owes the creditor; or

a specified part of such a debt;

will not be repaid until other specified debts that the company owes are repaid to a specified extent.

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