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Intercreditor Agreement First Priority Lien Cap Clause

Book Publication Date: May 2014
Description: An intercreditor agreement is an agreement between two groups of lenders with separate debt obligations secured by common collateral of a borrower. An intercreditor agreement delineates the rights and obligations of each group of lenders in relation to the other lenders regarding the collateral if the borrower defaults under its debt obligations or files for bankruptcy. This sample clause places a cap on the debt that may be incurred under the first priority lien to limit the proceeds that will be paid out of shared collateral to the first lien lenders.
Type: Contract Clauses
PLI Item #: 133530
Practice Area: Banking and finance, Bankruptcy and restructuring, Bankruptcy process, Collateralized debt obligation, Financing, Intercreditor agreements, Securitization, Structured finance

Keywords: "intercreditor agreement"; "lien subordination"; "first lien obligations"; "second lien obligations"; "first lien claimholders"; "second lien claimholders"; "maximum first priority lien amount"; "debt cap"; "refinancing"; "amendment"; "restatement"

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