Second Lien Notes Indenture Clause Samples
The Second Lien Notes Indenture is a legal agreement that governs the terms and conditions of second lien notes issued by a company. It outlines the rights and obligations of both the issuer and the noteholders, including payment schedules, interest rates, and the priority of claims in the event of default. This indenture specifically establishes that the notes are secured by a second-priority lien on certain assets, meaning they are subordinate to first lien creditors but have priority over unsecured creditors. Its core function is to provide a clear framework for the issuance and management of second lien debt, ensuring all parties understand their rights and the order of repayment in case of insolvency.
Second Lien Notes Indenture. (i) The Second Lien Notes Indenture (A) shall be substantially similar in all material respects to the Old Notes Indenture, as in effect on the date hereof, except that (i) all covenants contained therein (other than covenants which are customarily different for an indenture governing high yield securities like the Second Lien Notes) shall be amended to be substantially consistent with the terms of the Credit Agreement (as defined herein), subject to certain cushions to be agreed in accordance with the Lender Exchange Agreement, with the obligations thereunder being guaranteed by the same entities that guarantee the obligations under the Credit Agreement and the obligations under such Second Lien Notes Indenture being secured by the same collateral securing the Credit Agreement, (ii) the debt covenant contained therein shall permit the Company to issue up to $50.165 million in aggregate principal amount of Second Lien Notes in the form of additional notes to be issued to the Holders in accordance with this Agreement, and (iii) interest shall be, at the option of the Company, 5.000% if paid in cash and 10.000% if paid-in-kind (provided, that if the Company and its subsidiaries have liquidity of more than an amount to be agreed between the Company and the Required Backstop Parties (as defined in the Lender Exchange Agreement) and set forth in the Second Lien Notes Indenture, interest shall be required to be paid in cash) and (B) shall not include any provision that materially and adversely and disproportionately affects either Holder in a manner different than all other holders of the Second Lien Notes without the written consent of the Holders.
(ii) The Company shall provide the Holders with drafts of the Second Lien Notes Indenture a reasonable period of time in advance of the execution of the Second Lien Notes Indenture and shall consider in good faith any reasonable comments to the Second Lien Notes Indenture received from the Holders or their legal counsel.
Second Lien Notes Indenture. There shall have been delivered to the Administrative Agent an executed copy of the Existing Second Lien Notes Indenture to be entered into on the Closing Date.
Second Lien Notes Indenture. There occurs a default or event of default under and as defined in the Second Lien Notes Indenture.”.