Parallel Debt Obligation Sample Clauses
A Parallel Debt Obligation clause establishes that a borrower owes an independent and separate debt to a security agent or facility agent, in addition to its obligations to the original lenders. In practice, this means that the agent is recognized as a creditor in its own right for the same amount as the lenders, allowing the agent to enforce the debt directly against the borrower, even if the underlying obligations to the lenders are not directly enforceable by the agent. This structure is commonly used in syndicated loans, particularly in civil law jurisdictions, to ensure that the security agent can effectively hold and enforce security interests on behalf of all lenders, thereby overcoming legal limitations on agency and collective enforcement.
Parallel Debt Obligation. (a) Each Loan Party hereby agrees and covenants with Agent by way of an acknowledgment of debt that it shall pay (the “Parallel Obligations”) to Agent sums equal to, and in the currency of, the obligations owing by such Loan Party under the Loan Documents (the “Principal Obligations”) as and when the same fall due for payment under the Loan Documents.
(b) Agent shall have its own independent right to demand payment of the Parallel Obligations by the Loan Parties (such demand to be made in accordance with, and only in the circumstances permitted under, the Loan Documents and only if permitted by this Agreement). The rights of the Loan Parties (other than Agent) or any person which a Loan Party represents to receive payment of the Principal Obligations are several from the rights of Agent to receive payment of the Parallel Obligations provided that the payment by a Loan Party of its Parallel Obligations to Agent in accordance with this Section 17.13 (Parallel Debt Obligation) shall be a good discharge of the corresponding Principal Obligations and the payment by a Loan Party of its Principal Obligations in accordance with the provisions of the Loan Documents shall be a good discharge of the corresponding Parallel Obligations. In the event of a good discharge of any Principal Obligations, Agent shall not be entitled to demand payment of the corresponding Parallel Obligations and such Parallel Obligations shall be discharged to the same extent. In the event of a good discharge of any Parallel Obligations, the Loan Parties or any person which a Loan Party represents shall not be entitled to demand payment of the corresponding Principal Obligations and such Principal Obligations shall be discharged to the same extent.
Parallel Debt Obligation. (a) Each Obligor (other than an On-Loan Obligor) and the Security Agent acknowledge that the obligations of each Obligor (other than an On-Loan Obligor) under Clause 18.6 (Covenant to Pay) above are several and separate and independent from, and shall not in any way limit or affect, the corresponding obligations of that Obligor to any Finance Party under any Senior Finance Document (its “Corresponding Debt”) nor shall the amounts for which each Obligor (other than an On-Loan Obligor) is liable under Clause 18.6 (Covenant to Pay) above (its “Parallel Debt”) be limited or affected in any way by its Corresponding Debt, provided that:
(i) the Parallel Debt of each Obligor (other than an On-Loan Obligor) shall be decreased to the extent that its Corresponding Debt has been irrevocably paid or (in the case of guarantee obligations) discharged; and
(ii) the Corresponding Debt of each Obligor (other than an On-Loan Obligor) shall be decreased to the extent that its Parallel Debt has been irrevocably paid or (in the case of guarantee obligations) discharged.
(b) For the purpose of this Clause 18.7, the Security Agent acts in its own name and not as a trustee, and its claims in respect of the Parallel Debt shall not be held on trust. The Security granted under the Senior Finance Documents (other than the On-Loan Finance Documents) to the Security Agent to secure the Parallel Debt is granted to the Security Agent in its capacity as creditor of the Parallel Debt and shall not be held on trust.
(c) All monies received or recovered by the Security Agent pursuant to this Clause 18.7, and all amounts received or recovered by the Security Agent from or by the enforcement of any Security granted to secure the Parallel Debt, shall be applied in accordance with this Deed.
(d) Without limiting or affecting the Security Agent’s rights against the Obligors (whether under this Clause 18.7 or under any other provision of the Senior Finance Documents), each Obligor acknowledges that nothing in this Clause 18.7 shall impose any obligation on the Security Agent to advance any sum to any Obligor or otherwise under any Senior Finance Document.
(e) In addition, but without prejudice to the foregoing, the Security Agent shall be the joint creditor (together with the relevant Finance Party) of all obligations of each Obligor (other than the On-Loan Obligors) towards each of the Finance Parties under the Senior Finance Documents.
Parallel Debt Obligation. 3.1 Each Obligor hereby agrees and covenants with the Security Trustee by way of an abstract acknowledgement of debt that it shall pay to the Security Trustee sums equal to, and in the currency of, the Secured Obligations owing by it under the Relevant Documents (the "PRINCIPAL OBLIGATIONS") as and when the same fall due for payment under the Relevant Documents (the "PARALLEL OBLIGATIONS").
3.2 The Security Trustee shall have its own independent right to demand payment of the Parallel Obligations by the Obligors (such demand to be made in accordance with, and only in the circumstances permitted under, the Relevant Documents and only if permitted by this Deed). The rights of the Secured Creditors (other than the Security Trustee) or any person which a Secured Creditor represents to receive payment of the Principal Obligations are several from the rights of the Security Trustee to receive payment of the Parallel Obligations PROVIDED THAT the payment by an Obligor of its Parallel Obligations to the Security Trustee in accordance with this Clause 3 shall be a good discharge of the corresponding Principal Obligations and the payment by an Obligor of its Principal Obligations in accordance with the provisions of the Relevant Documents shall be a good discharge of the corresponding Parallel Obligations. In the event of a good discharge of any Principal Obligations the Security Trustee shall not be entitled to demand payment of the corresponding Parallel Obligations and such Parallel Obligations shall be discharged to the same extent. In the event of a good discharge of any Parallel Obligations the Secured Creditors or any person which a Secured Creditor represents shall not be entitled to demand payment of the corresponding Principal Obligations and such Principal Obligations shall be discharged to the same extent.
Parallel Debt Obligation