What is Pari Passu Intercreditor agreement?

What is Pari Passu Intercreditor agreement?

Pari Passu Intercreditor Agreement means an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent between the Administrative Agent and one or more collateral agents or representatives for the holders of other Indebtedness that is secured by a Lien on the Collateral that is …

What is an Intercreditor agreement?

An agreement among lenders, or classes of lenders, describing their respective rights and obligations with respect to the borrower and its assets. This agreement can also specify how payments from the borrower are to be applied among the lenders.

What is an Intercreditor and Subordination Agreement?

An intercreditor agreement is a bit different than a subordination agreement. They both serve to do the same thing, allow two different lenders to “split up” the collateral of a business so both can be secured in the first lien on their respective collateral.

How does an Intercreditor agreement work?

An agreement among lenders, or classes of lenders, describing their respective rights and obligations with respect to the borrower and its assets. This agreement can also specify how payments from the borrower are to be applied among the lenders. …

What is the purpose of Intercreditor agreement?

The Intercreditor Agreement, a recommendation of the Sunil Mehta committee, aims to deal with bad loans as an attempt to speed up the resolution of stressed assets.

Are Intercreditor agreements required?

A properly drafted intercreditor agreement among the parties to the transaction is necessary to ensure that their relative rights and obligations are enforced in a distress or bankruptcy situation.

What are some key considerations of an Intercreditor agreement?

Key Provisions to Focus on when Negotiating Intercreditor…

• Identity of Mezzanine Lender.
• Foreclosure of Pledged Equity Collateral.
• Cure Rights.
• Purchase Option.
• Consent Rights.
• Financing of Mezzanine Loan.
• Mezzanine Lender as “Affiliate” of Mortgage Borrower.