Payment Upon Senior Default Sample Clauses
The 'Payment Upon Senior Default' clause establishes the conditions under which payments may be made to junior creditors if a default occurs on senior debt. Typically, this clause restricts or prohibits payments to subordinated or junior lenders when the borrower is in default on its obligations to senior lenders, ensuring that senior creditors are prioritized. For example, if a company fails to make a required payment on its senior loan, any scheduled payments to holders of subordinated debt may be suspended until the default is resolved. This clause's core function is to protect the interests of senior lenders by ensuring they are paid first in the event of financial distress, thereby managing risk and maintaining the agreed-upon payment hierarchy.
Payment Upon Senior Default. No Obligor may make and no Junior Creditor may receive any payment of principal, interest or any other amount due or owing with respect to the Junior Obligations if, at the time of such payment:
(a) Subject to clauses (D)-(E) of this subsection 2.3, (i) the Obligors and the Junior Creditors or any Junior Trustee shall have received a Senior Default Notice from the Trustee or any Holder stating that a Senior Payment Default exists, and (ii) such Senior Payment Default shall not have been cured or waived in accordance with the terms of the Senior Debt Documents; or
(b) Subject to clauses (A)-(E) of this subsection 2.3, (i) the Obligors and the Junior Creditors or any Junior Trustee shall have received a Senior Default Notice from the Trustee stating that a Senior Non-Payment Default exists or would be created by the making of such payment, (ii) such Senior Non-Payment Default shall not have been cured or waived in accordance with the terms of the Senior Debt Documents and (iii) 90 days shall not have elapsed since the date such notice was received; or
(c) Notwithstanding clauses (a) and (b) above, subject to clauses (D)-(E) of this subsection 2.3, the Trustee shall have accelerated the Senior Debt or the Trustee or the Holders shall have instituted judicial proceedings seeking to enforce payment of or to collect the whole or any part the Senior Debt against any Obligor and the Trustee shall have notified the Junior Creditors of that fact. So long as such payments are not otherwise prohibited under this subsection 2.3, Obligors may resume payments (including all payments missed due to the application of clause (a), (b) or (c) of this subsection 2.3) in respect of the Junior Obligations or any judgment with respect thereto:
(i) in the case of a Senior Payment Default referred to in clause (a) of this subsection 2.3, upon a cure or waiver of such Senior Payment Default in accordance with the terms of the Senior Debt Documents; or
(ii) in the case of a Senior Non-Payment Default referred to in clause (b) of this subsection 2.3, upon the earlier to occur of (x) the cure or waiver of such Senior Non-Payment Default in accordance with the terms of the Senior Debt Documents, or (y) the expiration of such period of 90 days; or
(iii) if the acceleration of the Senior Debt referred to in clause (c) of this subsection 2.3 is rescinded and if each judicial proceeding referred to in clause (c) of this subsection 2.3 is dismissed; provided that no other or subsequent event...
Payment Upon Senior Default. No Obligor may make and no Junior Creditor may receive any payment of principal, interest or any other amount due or owing with respect to the Junior Obligations if, at the time of such payment:
Payment Upon Senior Default. Company may not make and Junior --------------------------- Creditor may not receive any payment of principal, interest or any other amount due with respect to the Junior Debt if (i) at the time of such payment a Senior Default exists which shall not have been cured or waived in accordance with the terms of the Senior Debt Documents or (ii) the making of such payment would result in a Senior Default.
Payment Upon Senior Default