Subordination Agreement Private Companies

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SUBORDINATION AGREEMENT

This SUBORDINATION AGREEMENT (hereinafter referred to as the “Agreement”) is made and entered into on this {{day}} day of {{month}}, {{year}},

BETWEEN:

1. {{Subordinating_Creditor_Company_Name}}, a company duly incorporated and registered under the laws of {{Country}}, with its registered office located at {{Subordinating_Creditor_Company_Address}} (hereinafter referred to as the “Subordinating Creditor”, which expression shall unless repugnant to the context or meaning thereof, include its successors-in-title and assigns);

AND

2. {{Senior_Creditor_Company_Name}}, a company duly incorporated and registered under the laws of {{Country}}, with its registered office located at {{Senior_Creditor_Company_Address}} (hereinafter referred to as the “Senior Creditor”, which expression shall unless repugnant to the context or meaning thereof, include its successors-in-title and assigns);

AND

3. {{Debtor_Company_Name}}, a company duly incorporated and registered under the laws of {{Country}}, with its registered office located at {{Debtor_Company_Address}} (hereinafter referred to as the “Debtor”, which expression shall unless repugnant to the context or meaning thereof, include its successors-in-title and assigns).

RECITALS

A. The Debtor is indebted to the Subordinating Creditor in the principal amount of {{Subordinating_Debt_Amount}} ({{Subordinating_Debt_Amount_Words}}) (hereinafter referred to as the “Subordinated Debt”) pursuant to the terms of a loan agreement dated {{Subordinated_Debt_Agreement_Date}} (the “Subordinated Debt Agreement”).

B. The Debtor is or will be indebted to the Senior Creditor in the principal amount of {{Senior_Debt_Amount}} ({{Senior_Debt_Amount_Words}}) (hereinafter referred to as the “Senior Debt”) pursuant to the terms of a loan agreement dated {{Senior_Debt_Agreement_Date}} (the “Senior Debt Agreement”).

C. The Subordinating Creditor has agreed to subordinate the Subordinated Debt and all its rights and claims against the Debtor to the Senior Debt and all rights and claims of the Senior Creditor against the Debtor, on the terms and conditions set forth in this Agreement.

AGREEMENT TO SUBORDINATE

1.1 The Subordinating Creditor hereby irrevocably and unconditionally subordinates the Subordinated Debt and all its present and future claims, rights, and interests against the Debtor, whether arising under the Subordinated Debt Agreement or otherwise, to the Senior Debt and all present and future claims, rights, and interests of the Senior Creditor against the Debtor, whether arising under the Senior Debt Agreement or otherwise.

1.2 This subordination extends to all principal, interest, fees, costs, expenses, and any other amounts now or hereafter due or payable in connection with the Subordinated Debt.

PAYMENTS AND ENFORCEMENT

2.1 Notwithstanding any provision to the contrary in the Subordinated Debt Agreement, the Debtor shall not make, and the Subordinating Creditor shall not demand or accept, any payment, repayment, prepayment, or distribution on account of the Subordinated Debt, or any part thereof, until the Senior Debt has been indefeasibly paid in full.

2.2 In the event that the Debtor makes any payment or distribution on account of the Subordinated Debt in contravention of this Agreement, the Subordinating Creditor shall hold such payment or distribution in trust for the Senior Creditor and shall immediately remit the same to the Senior Creditor.

2.3 The Subordinating Creditor agrees that it will not take any steps to enforce, recover, or realize upon the Subordinated Debt, or any security for the Subordinated Debt, until the Senior Debt has been indefeasibly paid in full.

INSOLVENCY

3.1 In the event of any insolvency, bankruptcy, liquidation, receivership, or analogous proceedings involving the Debtor, the Senior Creditor shall be entitled to receive indefeasible payment in full of the Senior Debt before the Subordinating Creditor receives any payment, distribution, or dividend on account of the Subordinated Debt.

REPRESENTATIONS AND WARRANTIES

4.1 The Subordinating Creditor represents and warrants to the Senior Creditor that it is the sole legal and beneficial owner of the Subordinated Debt, free and clear of any encumbrances, and has the full power and authority to enter into and perform its obligations under this Agreement.

4.2 The Debtor represents and warrants that it has the full power and authority to enter into and perform its obligations under this Agreement.

GOVERNING LAW AND JURISDICTION

5.1 This Agreement shall be governed by and construed in accordance with the laws of {{Country}}.

5.2 Any dispute arising out of or in connection with this Agreement shall be subject to the exclusive jurisdiction of the courts of {{Country}}.

MISCELLANEOUS

6.1 This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, and negotiations, whether written or oral, relating to the subordination.

6.2 This Agreement may not be amended or modified except by a written instrument signed by all parties hereto.

6.3 This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

IN WITNESS WHEREOF

the parties have executed this Agreement on the date first above written.

_____________________________

For: {{Subordinating_Creditor_Company_Name}}

Name: {{Subordinating_Creditor_Signatory_Name}}

Title: {{Subordinating_Creditor_Signatory_Title}}

_____________________________

For: {{Senior_Creditor_Company_Name}}

Name: {{Senior_Creditor_Signatory_Name}}

Title: {{Senior_Creditor_Signatory_Title}}

_____________________________

For: {{Debtor_Company_Name}}

Name: {{Debtor_Signatory_Name}}

Title: {{Debtor_Signatory_Title}}