Intercreditor Deed Template for United Arab Emirates

The Intercreditor Deed is essential in complex financing arrangements where multiple creditors hold different classes of debt or security interests in the UAE. This document becomes particularly relevant in project finance, syndicated lending, and structured finance transactions where various lenders have different priorities and rights. The deed must carefully navigate UAE legal requirements, including the UAE Civil Code, Commercial Code, and where applicable, Islamic finance principles. It typically includes detailed provisions on payment priorities, enforcement rights, security sharing, and creditor decision-making processes. The document is crucial for establishing clear procedures for handling defaults, enforcement actions, and distribution of proceeds, while ensuring compliance with UAE law and regulatory requirements. The Intercreditor Deed serves as the primary agreement governing relationships between different classes of creditors, including senior lenders, mezzanine lenders, and subordinated creditors.

1. Parties: Identification of all creditors, security agent, facility agent(s), and obligors

2. Background: Description of the existing facilities, purpose of the intercreditor arrangement, and related security structure

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the deed and interpretation rules

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

5. Payment Provisions: Rules governing the payment waterfall, sharing of payments, and turnover provisions

6. Effect of Insolvency Event: Provisions dealing with insolvency scenarios and creditors' rights during insolvency

7. Enforcement of Security: Procedures and rights regarding enforcement of security, including enforcement triggers and mechanics

8. Application of Proceeds: Order of application of proceeds from enforcement or recoveries

9. Security and Guarantees: Provisions regarding the holding and maintenance of security and guarantees

10. Changes to the Parties: Transfer and assignment provisions, including conditions for new creditors joining

11. Protection of Security Agent: Rights, protections, and indemnities for the Security Agent

12. Costs and Expenses: Allocation of costs and expenses among parties

13. Notices: Communication procedures and contact details

14. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction provisions