Intercreditor Agreement Template for Australia

The Intercreditor Agreement is essential in complex financing arrangements where multiple creditors provide different layers of debt to a borrower. It is commonly used in Australian financing transactions involving syndicated loans, secured lending, and structured finance arrangements. The document establishes a clear hierarchy of creditor rights, regulates the exercise of enforcement rights, and provides mechanisms for sharing security and managing conflicts between creditor groups. This agreement is particularly crucial in ensuring orderly enforcement processes and establishing clear protocols for payment priorities and security sharing arrangements. Under Australian law, it must comply with key legislation such as the Corporations Act 2001 (Cth) and the Personal Property Securities Act 2009 (Cth), while addressing specific requirements of the Australian lending market.

1. Parties: Identifies all creditor groups, security trustee, and other relevant parties to the agreement

2. Background: Sets out the context of the financing arrangements and purpose of the intercreditor agreement

3. Definitions and Interpretation: Defines key terms and establishes interpretation principles

4. Ranking and Priority: Establishes the ranking of debt and priority of payments between creditors

5. Payment Provisions: Regulates payments between creditors and payment waterfall arrangements

6. Turnover of Receipts: Provisions for sharing recoveries and redistribution of payments

7. Security and Guarantees: Details regarding shared security and guarantee arrangements

8. Enforcement: Rights and limitations regarding enforcement of security and guarantees

9. Application of Proceeds: Rules for distributing proceeds from enforcement or insolvency

10. New Debt and Security: Provisions regarding additional debt and security arrangements

11. Changes to Parties: Transfer and assignment provisions

12. Protection of Subordination: Provisions maintaining subordination arrangements

13. Costs and Expenses: Allocation of costs and expense arrangements

14. Notices: Communication requirements and contact details

15. Governing Law and Jurisdiction: Specifies Australian law as governing law and jurisdiction for disputes