DIP Lien Priority Sample Clauses
The DIP Lien Priority clause establishes the ranking of liens granted to a debtor-in-possession (DIP) lender in bankruptcy proceedings. It specifies that the DIP lender’s security interest will take precedence over existing liens, except for certain permitted exceptions, ensuring the DIP lender is repaid before other creditors from the collateral. This clause is crucial for encouraging lenders to provide financing to companies in bankruptcy by offering them a superior claim on assets, thereby facilitating the debtor’s continued operations during restructuring.
DIP Lien Priority. Solely to the extent provided in the DIP Credit Agreement, the Interim Order and this Final Order, the DIP Liens are subject only to the Non-Primed Liens and, in the event of the occurrence and during the continuance of an Event of Default or Default or both, to the Carve Out and the CCAA Charges. The DIP Liens granted by the U.S. Debtors (other than SMBI, Inc.) and SSC Canada shall secure all of the DIP Obligations, and the DIP Liens granted by the Canadian Debtors (other than SSC Canada) and SMBI, Inc. shall secure only the DIP Obligations of the Canadian Guarantors relative to the Canadian Term Loan and the Canadian Revolving Facility. The DIP Liens shall not be made subject to or pari passu with any lien or security interest (other than the Non-Primed Liens) by any court order heretofore or hereafter entered in the Cases and shall be valid and enforceable against any trustee appointed in the Cases, upon the conversion of any of the Cases to a case under Chapter 7 of the Bankruptcy Code or in any other proceedings related to any of the foregoing (any “Successor Cases”), and/or upon the dismissal of any of the Cases. The DIP Liens shall not be subject to Sections 506(c), 510, 549, 550 or 551 of the Bankruptcy Code or the “equities of the case” exception of Section 552 of the Bankruptcy Code. To avoid any doubt, the liens securing the Pre-Petition Debt are to be subordinated to, and junior to, the liens and claims of the DIP Secured Parties.
DIP Lien Priority. The DIP Liens shall have the following priority with respect to assets of the Debtors’ estates, and subject in all respects to the Carve-Out:
(a) pursuant to Section 364(c)(2) of the Bankruptcy Code, the DIP Liens shall be first priority liens on all of the assets (now or hereafter acquired and all proceeds thereof) of the Debtors that are not otherwise subject to valid, perfected, and unavoidable liens in existence immediately prior to the Petition Date or liens that are perfected after the Petition Date as permitted by section 546(b) of the Bankruptcy Code; provided that in no instance shall the DIP Liens encumber the Excluded Property (as defined in the DIP Documents);
(b) pursuant to Section 364(c)(3) of the Bankruptcy Code, the DIP Liens shall be junior priority liens upon all DIP Collateral constituting the ABL Priority Collateral (now owned or hereafter acquired and all proceeds thereof), subject and junior only to, in order of priority: (1) the Carve Out; (2) the ABL Permitted Liens; (3) ABL Adequate Protection Liens (as defined herein); and (4) Prepetition ABL Liens; provided that, for the avoidance of doubt, the DIP Liens shall be senior in priority to the Prepetition Term Liens and Prepetition IPCo Liens and any liens granted as adequate protection in favor of the Prepetition Term Secured Parties or Prepetition IPCo Secured Parties with respect to ABL Priority Collateral (now owned or hereafter acquired);
(c) pursuant to Section 364(d) of the Bankruptcy Code, the DIP Liens shall be priming first-priority liens on all DIP Collateral (now or hereafter acquired and all proceeds thereof) that is “Collateral” as defined by each of the Prepetition Term Credit Agreement, the Prepetition ABL Credit Agreement, and the Prepetition IPCo Indentures to the extent such Collateral is not ABL Priority Collateral; provided that such DIP Liens shall be junior to, in order of priority, to: (i) the Carve Out, and (ii) the Permitted Liens. For the avoidance of doubt, the Prepetition ABL Liens, the Prepetition Term Liens, and the Prepetition IPCo Liens shall be junior to the DIP Liens and the Carve Out in all respects with respect to DIP Collateral that is not ABL Priority Collateral (now owned or hereafter acquired).
DIP Lien Priority. The DIP Liens securing the DIP Obligations are senior, first priority liens (except for the Junior Liens which are junior only to such valid and perfected Liens in existence on the Petition Date) and the Superpriority Claims shall be superior to any lien or claim in the DIP Collateral except as expressly and specifically set forth in paragraph 7. No other claim or lien having a priority superior to or pari passu with any of the DIP Obligations, the DIP Liens or the Adequate Protection Liens shall be granted while any of the DIP Obligations remain outstanding. The DIP Liens shall not be (i) subject to any lien or security interest that is avoided and preserved for the benefit of the Debtors’ estate under § 551 of the Bankruptcy Code, (ii) subordinated to or made pari passu with any other lien or security interest under § 364(d) of the Bankruptcy Code, or (iii) subject to marshalling or any similar remedy.
DIP Lien Priority. As security for the DIP Obligations, effective and perfected as of entry of this Final Order and without the necessity of the execution by the Debtors (or recordation or other filing) of mortgages, security agreements, control agreements, pledge agreements, financing statements, or other similar documents, or the possession or control by any DIP Secured Party of, or over, any DIP Collateral, the following security interests and liens, hereby are granted by the Debtors to each of the DIP Secured Parties (all property of the Debtors identified in clauses (a), (b), and (c) below being collectively referred to as the “DIP Collateral”), subject only to the Carve Out (all such liens on and security interests in the DIP Collateral granted to the DIP Secured Parties, pursuant to this Final Order, the DIP Credit Documents, the “DIP Liens”):