Legal Subordination Resolution

LEGAL SUBORDINATION RESOLUTION

This Legal Subordination Resolution is adopted on this day by the undersigned parties. Company Name: , a corporation organized under the laws of the State of , with principal office at (the "Company"), and Secured Creditor: , having an address at (the "Secured Creditor").

RECITALS

WHEREAS, the Company is indebted to Secured Creditor pursuant to that certain instrument described as dated in an original principal amount of (the "Senior Debt"); and

WHEREAS, the Company has existing or potential indebtedness, liabilities or obligations described herein to be subordinated (the "Subordinated Obligations"); and

WHEREAS, the parties desire to set forth by this resolution the terms, conditions and authorizations necessary to effect the subordination of the Subordinated Obligations to the Senior Debt.

NOW, THEREFORE, BE IT RESOLVED

1. Definitions. For purposes of this Resolution, the following terms shall have the meanings set forth below:
   Subordinated Obligations (general description)
   Senior Debt (designation)
2. Subordination. The Company hereby agrees that all Subordinated Obligations, whether now existing or hereafter arising, shall be subordinate and junior in right of payment to the Senior Debt and to any other obligations of the Company that are expressly senior to the Subordinated Obligations in accordance with the terms hereof and any separate subordination agreement executed by the parties. The Subordinated Obligations shall not be paid, collected or enforced until the Senior Debt has been paid in full or otherwise satisfied in accordance with the applicable loan documents.
3. Subordination Agreement; Further Assurances. The Company and Secured Creditor are authorized to execute and deliver one or more written subordination agreements and related instruments (collectively, the "Subordination Agreement") that implement the foregoing subordination on terms consistent with this Resolution. The officers of the Company are authorized to take all action and execute all documents necessary or desirable to effectuate the Subordination Agreement, including amendments, consents and certificates, provided such documents are not inconsistent with the terms of this Resolution.
4. Limitations on Enforcement. Until the Senior Debt has been indefeasibly paid in full, the holder of any Subordinated Obligation shall not, by act, suit or otherwise, enforce payment of or realize upon the Subordinated Obligations in a manner that would materially impair the rights of the Secured Creditor under the Senior Debt, including but not limited to commencing, prosecuting or otherwise participating in any foreclosure, receivership, insolvency, bankruptcy or similar proceedings against the Company that would adversely affect the Senior Debt.
5. Representations and Warranties. The Company represents and warrants that (a) it is duly organized and validly existing under the laws of the State of , (b) the execution and delivery of the Subordination Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action, and (c) when executed and delivered by the authorized officers, the Subordination Agreement will be the valid and binding obligation of the Company enforceable in accordance with its terms except insofar as enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights generally.
6. Authority and Ratification. The officers and directors of the Company are authorized and directed to do and perform all acts and to execute and deliver all documents as may be necessary or advisable to carry out the purposes and intent of this Resolution. All actions previously taken by such officers in connection with the subject matter hereof are hereby ratified and confirmed.
7. Notice of Subordination. The Company shall give prompt written notice to holders of Subordinated Obligations of the existence and terms of the subordination set forth in this Resolution and shall cause the Subordination Agreement or an appropriate notation to be recorded in the Company's records where necessary to provide constructive notice to third parties.
   Notice Recipient for Company Notice Address for Company
8. Conflicts; Priority. In the event of any inconsistency between this Resolution and the terms of the Subordination Agreement, the terms of the Subordination Agreement shall govern as to the specific matters covered thereby; provided, however, that such agreement shall be consistent with the substantive intent of this Resolution to subordinate the Subordinated Obligations to the Senior Debt. This Resolution shall not be construed to create or imply any novation or discharge of the Senior Debt.
9. Effective Date. This Resolution shall become effective on the date of execution by the Company and, to the extent required for enforcement of the Subordination Agreement, on the effective date set forth therein. Effective Date (if different):

MISCELLANEOUS

Governing Law: This Resolution, the Subordination Agreement and any dispute arising out of or relating to them shall be governed by and construed in accordance with the laws of the State of , without regard to principles of conflicts of law.

Entire Agreement: This Resolution embodies the full resolution of the parties with respect to the subordination addressed herein and supersedes all prior oral or written representations, agreements or understandings pertaining to the subject matter hereof to the extent inconsistent with this Resolution.

Severability: If any provision of this Resolution is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired thereby, and such provision shall be reformed only to the extent necessary to make it enforceable while preserving the parties' intent.

Amendments; Waiver: This Resolution may be amended, supplemented or otherwise modified only by a written instrument executed by the Company and the Secured Creditor. No failure or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof.

Counterparts: This Resolution may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures transmitted by electronic means shall be deemed original signatures for all purposes.

CERTIFICATION

The undersigned hereby certifies that the foregoing Resolution was duly adopted by the board of directors or other governing body of the Company in accordance with its bylaws and governing law, and that such Resolution is now in full force and effect and has not been modified or rescinded.

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