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The Intercreditor and Subordination Agreement is a crucial document in complex financing transactions under Malaysian law, typically used when multiple lenders provide different types of debt to the same borrower. This agreement is essential in establishing a clear hierarchy of creditor rights, particularly in situations involving senior debt, mezzanine finance, and subordinated debt. It details payment priorities, enforcement rights, and security sharing arrangements, ensuring orderly coordination among creditors in both normal operations and default scenarios. The document must comply with Malaysian legal requirements, including the Companies Act 2016 and Financial Services Act 2013, and is particularly important in syndicated loans, project finance, and corporate restructurings where multiple creditors have varying levels of priority.

1. Parties: Identification of all creditor groups (senior creditors, subordinated creditors), security trustee/agent, and the borrower/debtor

2. Background: Brief description of the debt facilities, purpose of the agreement, and existing security arrangements

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and references to facility agreements

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

5. Payment Provisions: Rules governing payments, including payment blockage, turnover of proceeds, and prohibited payments

6. Subordination: Detailed provisions on debt subordination, including payment restrictions and subordination of rights

7. Effect of Insolvency: Provisions dealing with insolvency events and their impact on creditor rights

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

9. Application of Proceeds: Waterfall provisions determining the order of application of enforcement proceeds

10. Security and Guarantees: Provisions regarding shared security and guarantees, including trust arrangements

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

12. Protection of Subordination: Provisions ensuring the effectiveness of the subordination arrangements

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

14. Notices: Communication requirements and contact details

15. Governing Law and Jurisdiction: Choice of law and jurisdiction provisions