PRIORITY LIEN; SENIORITY Clause Samples
The "Priority Lien; Seniority" clause establishes the order in which liens or security interests are recognized and enforced against a particular asset or property. In practice, this clause specifies that certain liens will take precedence over others, meaning that in the event of default or liquidation, the holders of senior liens are paid before those with junior or subordinate liens. For example, a lender with a first-priority lien on collateral will be repaid before any subsequent lenders with lower-priority claims. This clause is essential for clarifying the hierarchy of claims, thereby reducing disputes among creditors and providing certainty regarding the order of repayment.
PRIORITY LIEN; SENIORITY. The Company represents, warrants and covenants that in the event of Bankruptcy of the Company, this Note and the indebtedness evidenced hereby, collectively, with all other Notes issued pursuant to the Purchase Agreement, shall:
(i) become secured by a lien on the assets of the Company and its wholly-owned subsidiaries as of the date of such Bankruptcy; and
(ii) be senior in right of payment in full to the payment of all Indebtedness of the Company created after the date of this Note. The term "