Subordination and Cession of Priority Leased Equipment

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

SUBORDINATION AND CESSION OF PRIORITY LEASED EQUIPMENT

This Agreement is made and entered into on this {{date_of_agreement}}

BETWEEN:

{{creditor_name}} (hereinafter referred to as "the Existing Creditor"), a company duly incorporated under the laws of {{country}}, with its registered office at {{existing_creditor_address}}.

AND

{{new_creditor_name}} (hereinafter referred to as "the New Creditor"), a company duly incorporated under the laws of {{country}}, with its registered office at {{new_creditor_address}}.

AND

{{debtor_name}} (hereinafter referred to as "the Debtor"), a company duly incorporated under the laws of {{country}}, with its registered office at {{debtor_address}}.

RECITALS

WHEREAS, the Existing Creditor has previously provided a loan/financing facility to the Debtor (the "Existing Facility") as evidenced by an agreement dated {{existing_facility_date}}, and as security for which, the Existing Creditor holds a claim over certain leased equipment as detailed in Annexure A hereto (the "Leased Equipment").

WHEREAS, the Debtor has applied for a new loan/financing facility from the New Creditor (the "New Facility") and as a condition precedent to the New Facility, the New Creditor requires the Existing Creditor to subordinate its claim over the Leased Equipment and cede the priority of its claim to the New Creditor.

SUBORDINATION OF CLAIM

The Existing Creditor hereby irrevocably and unconditionally subordinates its present and future claims against the Debtor in relation to the Leased Equipment, and its rights in and to the Leased Equipment, to the claims and rights of the New Creditor arising from or in connection with the New Facility.

This subordination shall mean that the Existing Creditor shall not be entitled to claim or enforce any right, title, or interest in or to the Leased Equipment, or receive any payment or benefit in respect thereof, until such time as the New Creditor's claims relating to the New Facility have been fully satisfied.

CESSION OF PRIORITY

The Existing Creditor hereby irrevocably and unconditionally cedes, assigns, and transfers all its right, title, and interest in and to the priority of its claim over the Leased Equipment to the New Creditor.

This cession of priority shall ensure that the New Creditor shall have a first-ranking claim and priority over the Leased Equipment, notwithstanding the date on which the Existing Creditor's security was perfected.

ACKNOWLEDGMENT BY DEBTOR

The Debtor hereby acknowledges and accepts the terms of this Subordination and Cession of Priority and specifically agrees that its obligations to the New Creditor in respect of the Leased Equipment shall at all times rank in priority to its obligations to the Existing Creditor in respect of the same.

REPRESENTATIONS AND WARRANTIES

The Existing Creditor represents and warrants that it has the full right, power, and authority to enter into this Agreement and to subordinate and cede its claims and priority as contemplated herein, and that the Leased Equipment is not subject to any other prior or conflicting claims or encumbrances other than those specifically disclosed to the New Creditor.

GOVERNING LAW AND JURISDICTION

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

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

GENERAL PROVISIONS

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, and agreements.

No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by all parties hereto.

SIGNATURES

_____________________________

For: {{existing_creditor_name}}

Name: {{existing_creditor_representative_name}}

Title: {{existing_creditor_representative_title}}

Date: {{existing_creditor_signature_date}}

_____________________________

For: {{new_creditor_name}}

Name: {{new_creditor_representative_name}}

Title: {{new_creditor_representative_title}}

Date: {{new_creditor_signature_date}}

_____________________________

For: {{debtor_name}}

Name: {{debtor_representative_name}}

Title: {{debtor_representative_title}}

Date: {{debtor_signature_date}}