Legal Letter of Subordination

LEGAL LETTER OF SUBORDINATION

This Letter of Subordination (the "Agreement") is made effective as of , by and between Subordinating Creditor: , having a principal place of business at (hereinafter "Subordinating Creditor"), and Secured Party: , having a principal place of business at (hereinafter "Secured Party"). The Debtor under the Obligation is: .

RECITALS

WHEREAS, Debtor executed or is otherwise subject to that certain obligation evidenced by or secured under the security instrument identified as Loan/Account No.: (the "Obligation"), which Obligation is secured by liens, security interests or other encumbrances (collectively, the "Security") described as follows:

Collateral/Description:

WHEREAS, Subordinating Creditor claims or may claim an interest, lien or right to payment against the Debtor described as: ; and

WHEREAS, Secured Party requires that the lien, claim or other interest of the Subordinating Creditor be subordinated in right of payment and priority to the lien, security interest and rights of the Secured Party in order to preserve the priority of the Secured Party with respect to the Security described above.

NOW, THEREFORE

In consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. SUBORDINATION

Subordinating Creditor hereby irrevocably subordinates, charges and ranks its claim, lien, right to payment and all rights, remedies and interests of whatever nature that it now has or may hereafter acquire against the Debtor or the Security to and below the prior and superior rights and security interests of the Secured Party with respect to the Obligation in perpetuity or until such time as the Secured Party releases such priority in writing. This subordination applies to principal, interest, fees, expenses and all other amounts due under the subordinated claim.

2. SCOPE; FUTURE ADVANCES

The subordination provided by Subordinating Creditor shall apply to all present and future obligations and advances secured by the Security, including without limitation any renewals, extensions, modifications or future advances made by Secured Party after the date hereof. Subordinating Creditor agrees that it will not demand, accept, or exercise any rights against the Security that would impair or defeat the priority of Secured Party's lien, except as expressly agreed in writing by Secured Party.

3. ENFORCEMENT; LIMITATION

Until such time as the Secured Party's obligations under the Obligation have been indefeasibly paid in full, Subordinating Creditor shall not, directly or indirectly, foreclose upon, enforce, levy upon, or otherwise realize upon the Security, nor collect any amounts from the proceeds of the Security, except to the extent expressly permitted in writing by Secured Party. Any attempt to realize upon the Security in violation of this Agreement shall be voidable at the election of Secured Party.

4. REPRESENTATIONS AND WARRANTIES

Subordinating Creditor represents and warrants to Secured Party that: (a) it has full power and authority to enter into this Agreement and to perform its obligations hereunder; (b) this Agreement constitutes a legal, valid and binding obligation enforceable in accordance with its terms; (c) to Subordinating Creditor's knowledge, there are no other liens or claims of the same or higher priority on the referenced Security other than those disclosed in writing to Secured Party as of the Effective Date; and (d) the execution and delivery of this Agreement has not resulted in a conflict with any agreement to which Subordinating Creditor is a party.

5. COVENANTS

Subordinating Creditor covenants and agrees that it will: (a) execute and deliver such further instruments and do such further acts and things as may be reasonably requested by Secured Party to carry out the intent and purpose of this Agreement; (b) give prompt written notice to Secured Party of any assertion of claim, lien or encumbrance that may affect the Security; and (c) not subordinate, compromise or settle its claim against Debtor in a manner that would impair Secured Party's priority without Secured Party's prior written consent.

6. NOTICES

All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed duly given if delivered personally, sent by overnight courier, or mailed by certified mail, return receipt requested, to the addresses set forth below (or to such other address as a party may designate by written notice):

7. FURTHER ASSURANCES

Each party agrees to execute such further documents and take such further actions as may be reasonably necessary to effectuate the purposes of this Agreement, including, without limitation, execution of acknowledgements, estoppel certificates, subordination statements and amendments to financing statements.

8. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the state of , without regard to conflicts of law principles.

9. ENTIRE AGREEMENT

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

10. AMENDMENTS; WAIVERS

Any amendment or waiver of any provision of this Agreement shall be effective only if in writing and signed by the party against whom enforcement is sought. No failure or delay by any party in exercising any right shall operate as a waiver of such right.

11. SEVERABILITY

If any provision of this Agreement is determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

12. COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures transmitted by electronic means shall be binding.

MISCELLANEOUS

The parties acknowledge and agree that this Agreement is binding upon and shall inure to the benefit of their respective successors and permitted assigns. No assignment of rights or delegation of duties under this Agreement shall relieve the assigning party of liability hereunder.

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