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A Senior Promissory Note is typically used in corporate financing situations where establishing debt priority is crucial. This document, governed by Indian law, particularly the Negotiable Instruments Act, 1881, and the Indian Contract Act, 1872, represents a formal, unconditional promise by the issuer to pay a specified sum to the holder. It's commonly employed when companies need to raise capital while providing investors with senior payment priority over other creditors. The note includes essential information such as principal amount, interest rate, payment terms, maturity date, and events of default. Senior Promissory Notes are particularly valuable in structured financing transactions, corporate borrowings, and situations requiring clear documentation of senior debt obligations. They offer creditors enhanced security through their senior ranking status while providing borrowers with a straightforward mechanism for documenting significant debt obligations.

1. Promise to Pay: Unconditional promise to pay a specific sum, including the principal amount, interest rate, and maturity date

2. Interest Terms: Detailed terms of interest payment, including rate, calculation method, and payment frequency

3. Payment Terms: Specifics of how and when payments will be made, including place of payment and payment mechanics

4. Senior Status: Provisions establishing the senior priority status of the note in relation to other indebtedness

5. Events of Default: Circumstances that constitute default and trigger acceleration of the note

6. Representations and Warranties: Basic representations about the maker's capacity and authority to issue the note

7. Notices: Process and addresses for giving notices under the note

8. Governing Law: Specification of Indian law as governing law and jurisdiction details