Subordination Agreement to Secured Debt

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Subordination Agreement to Secured Debt

Subordination Agreement to Secured Debt

RECITALS

WHEREAS, {{debtor_company_name}} (the "Debtor") is indebted to {{senior_lender_name}} (the "Senior Lender") under the terms of a {{senior_loan_agreement_name}} dated {{senior_loan_agreement_date}} (the "Senior Loan Agreement"), which indebtedness is secured by certain assets of the Debtor (the "Senior Collateral");

WHEREAS, the Debtor is also indebted to {{subordinate_lender_name}} (the "Subordinate Lender") under the terms of a {{subordinate_loan_agreement_name}} dated {{subordinate_loan_agreement_date}} (the "Subordinate Loan Agreement"), which indebtedness may also be secured by certain assets of the Debtor (the "Subordinate Collateral");

WHEREAS, the Senior Lender has requested, and the Subordinate Lender has agreed, that the Subordinate Debt and any security interests securing it shall be subordinate in right of payment and priority to the Senior Debt and the security interests securing it;

AGREEMENT TO SUBORDINATE

The Subordinate Lender hereby irrevocably and unconditionally subordinates the Subordinate Debt and any and all security interests, liens, charges, and encumbrances securing the Subordinate Debt to the Senior Debt and the security interests, liens, charges, and encumbrances securing the Senior Debt, in each case, as more fully described herein.

PAYMENT STANDSTILL

Notwithstanding any provision in the Subordinate Loan Agreement or any other agreement, the Subordinate Lender agrees that, until the Senior Debt has been indefeasibly paid in full and all commitments to extend credit thereunder have been terminated, the Subordinate Lender shall not demand, accept, or receive any payment (whether of principal, interest, fees, or otherwise) on account of the Subordinate Debt, other than {{permitted_payments_details}}.

APPLICATION OF PROCEEDS UPON ENFORCEMENT

In the event of any insolvency, bankruptcy, liquidation, dissolution, receivership, or other marshalling of the assets and liabilities of the Debtor, or upon the realization of any collateral by the Senior Lender, all proceeds from the Senior Collateral and, to the extent permitted by law, the Subordinate Collateral, shall first be applied to the indefeasible payment in full of the Senior Debt before any amount is applied to the Subordinate Debt.

SUBORDINATE LENDER REPRESENTATIONS AND WARRANTIES

The Subordinate Lender represents and warrants that it has the full power and authority to enter into this Agreement and to perform its obligations hereunder, and that this Agreement constitutes a legal, valid, and binding obligation of the Subordinate Lender, enforceable in accordance with its terms.

SENIOR LENDER RIGHTS

The Senior Lender may, at its option, enforce its rights under the Senior Loan Agreement and its security interests without regard to the Subordinate Debt or this Agreement, except as expressly provided herein. The Subordinate Lender acknowledges that the Senior Lender is relying on this Agreement in its dealings with the Debtor.

GOVERNING LAW AND JURISDICTION

This Agreement shall be governed by and construed in accordance with the laws of {{governing_jurisdiction}}. Any legal action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the courts of {{governing_jurisdiction}}.

MISCELLANEOUS

This Agreement constitutes the entire agreement between the parties concerning the subordination of the Subordinate Debt and supersedes all prior agreements and understandings, whether oral or written. No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in writing and signed by all parties hereto.

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 Subordination Agreement as of the date first written above.

___________________________

{{senior_lender_name}}

By: _______________________

Name: {{senior_lender_signatory_name}}

Title: {{senior_lender_signatory_title}}

___________________________

{{subordinate_lender_name}}

By: _______________________

Name: {{subordinate_lender_signatory_name}}

Title: {{subordinate_lender_signatory_title}}

___________________________

{{debtor_company_name}}

By: _______________________

Name: {{debtor_signatory_name}}

Title: {{debtor_signatory_title}}