Subordination Terms Clause Samples
The Subordination Terms clause establishes the priority of certain debts or obligations in relation to others, specifying that some claims will be ranked below others in the event of repayment or liquidation. In practice, this means that if a borrower defaults or assets are distributed, subordinated creditors will only be paid after senior creditors have been satisfied. This clause is essential for clarifying the order of payment among creditors, thereby managing risk and expectations for all parties involved.
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Subordination Terms. The Company covenants and agrees that the indebtedness evidenced by each series of Securities is subordinate and junior in right of payment to all Senior Indebtedness to the extent provided in this Article XIV or as further provided in an indenture supplemental hereto or a Board Resolution with respect to a series of Securities adopted pursuant to Section 2.01 hereof, and each holder of Securities of each series, by its acceptance thereof, likewise covenants and agrees to such subordination and shall be bound by the provisions thereof. Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the benefits of these subordination provisions irrespective of any amendment, modification or waiver of any term of the Senior Indebtedness or extension or renewal of the Senior Indebtedness. In the event that the Company shall default in the payment of any principal of (or premium, if any) or interest on any Senior Indebtedness when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise, then, upon written notice of such default to the Company by the holders of Senior Indebtedness or any trustee or representative thereof, unless and until such default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in cash, property, securities, by set-off or otherwise) shall be made or agreed to be made on account of the principal of or interest on any of the Securities, or in respect of any redemption, retirement, purchase or other acquisition of any of the Securities. In the event of:
(a) any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding relating to the Company, its creditors or its property,
(b) any proceeding for the liquidation, dissolution or other winding up of the Company, voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings,
(c) any assignment by the Company for the benefit of creditors, or
(d) any other marshalling of the assets of the Company, all Senior Indebtedness shall first be paid in full before any payment or distribution, whether in cash, securities or other property, shall be made to any holder of any of the Securities on account thereof. Any payment or distribution, whether in cash, securities or other property (other than securities of the Company or any other corporation provided for by a plan of reorganization or readjustmen...
Subordination Terms. The payment by the Company of the principal of, premium, if any, and interest on any series of Securities issued hereunder shall be subordinated to the extent set forth in an indenture supplemental hereto relating to such series.
Subordination Terms. The payment by the Company of the principal of, premium, if any, and interest on any series of securities issued hereunder may be subordinated in the manner contemplated by Section 2.01.
Subordination Terms. The Securities of a series issued hereunder shall be subordinated in right of payment to the extent provided in the subordination terms with respect to such Securities that are established pursuant to Section 2.01.
Subordination Terms. The payment by the Company of the principal of, premium, if any, and interest on the Securities of any series shall be subordinated in the manner and to the extent provided in the Securities of such series, as contemplated by Sections 2.01 and 2.02. ARTICLE ELEVEN
Subordination Terms. Subject to the terms set forth in Section 3, the parties hereto agree as follows:
Subordination Terms. Mortgages and Title Policies
Subordination Terms. (1) This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.
Subordination Terms. 39 ARTICLE ELEVEN
Subordination Terms. General Subordination Terms: • Junior obligations to be payment subordinated to all Secured Obligations (and any amendment, restatement, amendment and restatement, renewal, extension, replacement or substitution or other modification or reinstatement thereof) until the Termination Date. • Payments in respect of junior obligations prohibited unless (i) constituting conversion to or payment in Equity Interests of any direct or indirect parent company of Holdings, (ii) PIK interest, (iii) made with Equity Issuance Proceeds or (iv) to the extent the maturity date of the Secured Obligations has been extended beyond the original scheduled maturity date therefor, payment of accrued and unpaid interest and principal at the stated maturity of the junior obligations (but in the case of clauses (iii) and (iv), only so long as no Default or Event of Default has occurred and is continuing). • Junior obligations will not be secured, and the junior creditors will not take any collateral enforcement action and will not interfere in the enforcement of collateral securing the Secured Obligations. • Junior creditors shall not be permitted to take any debt enforcement action during a Standstill Period. A “Standstill Period” shall be defined as either (i) the period commencing on the date on which the Administrative Agent receives a standstill notice from a junior creditor that a default has occurred under the applicable junior obligation (which notice shall identify the specific junior default) and ending on the earliest of (a) the occurrence of a bankruptcy or other insolvency proceeding with respect to the Credit Party obligated on such junior obligation, (b) the acceleration of any portion of the obligations then outstanding under the Credit Agreement or any other Credit Document, and (c) the commencement of any foreclosure action against more than 90% (by value) of Collateral by the senior parties; provided that, for purposes of clause (b) above, no mandatory prepayment required under the Credit Agreement shall constitute an “acceleration” thereof or (ii) such other standstill period that is more favorable to the senior parties. • Junior creditors will not contest the validity or enforceability of the Obligations under the Credit Documents or any other Secured Obligation or the priority, perfection, validity or enforceability of any Liens securing the Secured Obligations. • Customary turnover provisions by junior creditors in the event of receipt of any prohibited payment...