Intercreditor And Subordination Agreement Template for Netherlands

The Intercreditor and Subordination Agreement is essential in complex financing transactions where multiple creditors have different priorities and rights in relation to the same debtor. This document, governed by Dutch law, is particularly crucial in leveraged finance, project finance, and restructuring scenarios where there are multiple layers of debt (such as senior debt, mezzanine debt, and shareholder loans). It provides clarity on payment priorities, enforcement rights, and the mechanics of subordination, helping prevent disputes between creditors and ensuring orderly distribution of proceeds in enforcement scenarios. The agreement must comply with Dutch legal requirements and is typically used alongside facility agreements and security documents in sophisticated financing structures.

1. Parties: Identification of all parties to the agreement, including senior creditors, junior creditors, security agent (if any), and the debtor

2. Background: Context of the agreement, description of the various debt facilities, and purpose of the intercreditor arrangements

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and interpretation rules

4. Ranking and Priorities: Establishes the ranking of debt and priority of payments between different classes of creditors

5. Subordination Provisions: Detailed provisions regarding the subordination mechanics, including payment subordination and debt subordination

6. Payment Restrictions: Restrictions on payments to junior creditors and conditions under which such payments are permitted

7. Turnover Provisions: Obligations to turn over unauthorized payments or recoveries to the appropriate creditor class

8. Enforcement: Rights and limitations regarding enforcement actions by different creditor classes

9. Application of Proceeds: Order of application of proceeds from enforcement or insolvency

10. Principal Debtor Provisions: Obligations and restrictions on the principal debtor regarding payments and new debt

11. Representations and Warranties: Standard representations and warranties from each party

12. Information Sharing: Provisions regarding sharing of information between creditor groups

13. Changes to the Parties: Transfer and assignment provisions, including accession mechanics

14. Notices: Communication requirements and contact details for notices

15. Miscellaneous: Standard boilerplate provisions including amendments, waivers, and severability

16. Governing Law and Jurisdiction: Choice of Dutch law and jurisdiction provisions