PRIORITY; SUBORDINATION Sample Clauses
The "PRIORITY; SUBORDINATION" clause establishes the order in which different debts, claims, or interests are paid or recognized, particularly in the context of financial agreements or security interests. It specifies which obligations take precedence over others, and may require certain claims to be subordinated, meaning they are paid only after higher-priority claims have been satisfied. For example, in a loan agreement, this clause might state that a lender's rights are subordinate to those of another creditor. The core function of this clause is to clearly allocate the order of payment or enforcement among multiple parties, thereby reducing disputes and clarifying risk in the event of default or insolvency.
PRIORITY; SUBORDINATION. (a) NO PAYMENT IF DEFAULT ON SENIOR INDEBTEDNESS. No payment of principal of, premium, if any, or interest on this Note or on account of any purchase or redemption or other acquisition of the Note, whether at maturity or otherwise, shall be made upon, or accepted with respect to, this Note, and the Holder shall not initiate any action to accelerate the maturity of the Note or exercise any remedy to seek collection if at the time of such payment the Holder has received written notice from the Company or a holder of Senior Debt (as defined below) that there exists or, after giving effect to such payment, there would exist any default in respect of any Senior Debt or under any agreement pursuant to which such Senior Debt was issued (a "Default"); PROVIDED, HOWEVER, that the foregoing restriction shall cease to apply with respect to a Default upon the earliest to occur of (i) the commencement by any holder of Senior Debt of the exercise of its remedies against the Company or its property including, without limitation, any action, suit or other legal proceeding against the Company or its property based upon such Default, or (ii) at the expiration of 180 days after the date of such notice if no holder of Senior Debt shall have commenced the exercise of its remedies against the Company or its property including, without limitation, any action, suit or other legal proceeding against the Company or its property based upon such Default. Upon the maturity of any Senior Debt by lapse of time, acceleration or otherwise, all principal or, premium, if any, interest and other amounts due or to become due on all such Senior Debt shall first be paid in full in cash, cash equivalents or in any other manner acceptable to the holders of Senior Debt (hereinafter, "Payment in Full" or "Paid in Full"), or such payment shall have been provided for to the satisfaction of the holders of Senior Debt before any payment on account of principal of, premium, if any, interest or any other amounts shall be made upon this Note.
PRIORITY; SUBORDINATION. (a) Rank. All principal of, premium, if any, interest and other amounts due or to become due on all this Debenture shall first be paid in full (hereafter, "Payment in Full") in accordance with the terms hereof before any payment on account of principal of, premium, if any, interest, dividends or any other amounts shall be made upon any Junior Securities, whether on account of any purchase or redemption or other acquisition of such Junior Securities, at maturity or otherwise.
PRIORITY; SUBORDINATION. Secured Party’s security interest constitutes a first-priority purchase-money security interest, in each Business Location’s Acquired Assets and only to the extent of the purchase-money obligation incurred as their price (the security interest securing cross-collateralized obligations being an ordinary, non-purchase-money security interest as provided in Section 4), only upon the release or subordination of the pre-existing lien securing the applicable Seller SBA Loan (as defined in Section 1.2.6 of the APA), which Seller is obligated to cause on or before the applicable Operational Transfer Date as a condition to delivering possession under Section 1.2.6 of the APA; until such release or subordination, that Seller SBA Loan lien may be senior to the security interest granted hereby. If the Debtor or any Borrower funds any portion of the Purchase Price through an SBA or other third-party loan, the relative priority of Secured Party’s lien shall be governed by Section 1.2.5 of the APA; absent a separately executed written subordination or standby agreement, Secured Party shall not be required to subordinate or release its purchase-money security interest.