Subordination Agreement Template

SUBORDINATION AGREEMENT

This Subordination Agreement (the Agreement) is made and entered into as of by and between Secured Creditor: with address at (Secured Creditor), and Subordinating Creditor: with address at (Subordinating Creditor).

RECITALS

WHEREAS, Obligor: is or may be indebted to Secured Creditor under certain obligations and security agreements evidenced by or related to amounts owing in respect of principal, interest, fees and costs in the aggregate principal amount of (the Senior Obligations).

WHEREAS, Subordinating Creditor asserts (or may assert) certain debts, obligations or claims against Obligor and seeks to have such claims retained, preserved and subordinated in favor of the Senior Obligations (the Subordinated Claims); and

WHEREAS, Secured Creditor and Subordinating Creditor desire to set forth the relative priority, subordination and treatment of the Subordinated Claims with respect to the Senior Obligations.

NOW, THEREFORE

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

1. DEFINITIONS

1.1 "Senior Obligations" means all obligations, liabilities and indebtedness of Obligor to Secured Creditor, whether now existing or hereafter arising, direct or indirect, absolute or contingent, matured or unmatured, including principal, interest, fees, expenses and collection costs.

1.2 "Subordinated Claims" means all debts, liabilities, obligations, liens, security interests, claims, demands and causes of action which Subordinating Creditor now has or may hereafter have against Obligor or its property, whether arising by contract, tort or operation of law, whether now existing or hereafter arising, and however evidenced.

2. SUBORDINATION

2.1 Subordination of Claims. Subordinating Creditor hereby absolutely and unconditionally subordinates, postpones and ranks all Subordinated Claims to the prior payment in full of the Senior Obligations. Subordinating Creditor agrees that no payment, distribution or realization shall be made on account of any Subordinated Claim until the Senior Obligations have been indefeasibly paid in full in cash.

2.2 Subordination of Liens and Security Interests. To the extent Subordinating Creditor holds or asserts any lien, security interest or encumbrance on any property of Obligor, such lien, security interest or encumbrance shall be subordinate and subject in all respects to the liens and security interests securing the Senior Obligations. Subordinating Creditor shall not exercise any remedies or enforce any rights as to such collateral that would impair the Senior Obligations without the prior written consent of Secured Creditor until the Senior Obligations are paid in full.

3. LIMITATION ON SUBORDINATING CREDITOR

3.1 No Acceleration or Enforcement. Subordinating Creditor shall not accelerate, sue, petition for judicial relief, levy execution, foreclose, or otherwise enforce any Subordinated Claims with respect to collateral or assets of Obligor so long as any Senior Obligations remain outstanding, except as expressly permitted by Secured Creditor in writing.

3.2 Payments and Settlements. Any payment, settlement or other disposition of a Subordinated Claim received by Subordinating Creditor prior to payment in full of the Senior Obligations shall be held in trust for the benefit of Secured Creditor and shall be promptly delivered to Secured Creditor to be applied to the Senior Obligations, unless Secured Creditor provides a written election otherwise.

4. REPRESENTATIONS AND WARRANTIES

Each party represents and warrants to the other that: (a) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; (b) it has full power and authority to enter into and perform its obligations under this Agreement; (c) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate or other action; and (d) this Agreement constitutes a legal, valid and binding obligation enforceable in accordance with its terms.

5. COVENANTS

Subordinating Creditor covenants that it will execute and deliver such further instruments and do such further acts and things as Secured Creditor may reasonably request to effectuate the subordination contemplated hereby, including without limitation subordination agreements, releases or amendments to existing documents evidencing Subordinated Claims.

6. NOTICES

Notices to Secured Creditor

Notices to Subordinating Creditor

All notices under this Agreement shall be in writing and delivered by hand, nationally recognized overnight courier or certified mail, return receipt requested, and shall be deemed given when received at the address provided in the preceding notice provisions or at such other address as a party may designate by notice in accordance with this Section.

7. REMEDIES

Secured Creditor may rely upon the representations, covenants and agreements of Subordinating Creditor contained in this Agreement and shall have all remedies available at law or in equity to enforce the terms hereof. The exercise by Secured Creditor of any remedy shall not constitute a waiver of any other remedy.

8. GOVERNING LAW; VENUE

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to principles of conflicts of law. Each party submits to the exclusive jurisdiction of the courts located in that State for resolution of disputes arising under or in connection with this Agreement.

9. ENTIRE AGREEMENT; SEVERABILITY

This Agreement constitutes the entire agreement among the parties with respect to its subject matter and supersedes all prior agreements and understandings, oral or written, relating thereto. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect and the invalid provision shall be reformed to the minimum extent necessary to make it valid and enforceable.

10. AMENDMENT; WAIVER; COUNTERPARTS

No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing signed by the party against whom enforcement is sought. No waiver of any breach shall constitute a waiver of any subsequent breach. This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute one instrument. Signatures transmitted by facsimile or electronic image shall be effective as original signatures.

11. BINDING EFFECT; NO THIRD PARTY BENEFICIARIES

This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties any right, remedy or claim under or by reason of this Agreement.

12. MISCELLANEOUS

Headings are for convenience only and shall not affect the interpretation of this Agreement. The parties agree this Agreement may be delivered in electronic form and that such electronic delivery shall be effective as delivery of an original document.

If requested by Secured Creditor, Subordinating Creditor shall, at Subordinating Creditor's expense, execute and deliver such additional instruments and take such additional actions as Secured Creditor reasonably deems necessary or desirable to confirm or perfect the subordination provided for herein.

ADDITIONAL INFORMATION

Description of Subordinated Claims (if applicable)

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