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Subordination Agreement Template

Used 4,885 times

A subordination agreement is a legal instrument that lists loans or debts in the order of priority. You can create a contract that safeguards both parties using the PandaDoc Subordination Agreement Template.

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  3. Subordination Agreement Template


Subordination Agreement Template

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Prepared for:


Prepared by:


This Subordination Agreement (the "Agreement") is entered into as of (Date), by and between:










WHEREAS, Borrower has executed and delivered to Lender a certain promissory note and/or other loan documents (collectively, the "Loan Documents"), which are secured by a priority lien on certain property more particularly described in Exhibit A attached hereto (the "Property");

WHEREAS, Borrower desires to obtain additional financing from a second lender, and the second lender (the "Second Lender") is willing to provide such financing subject to the subordination of its lien to the lien of Lender;

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

(a) Second Lender hereby subordinates its lien on the Property to the lien of Lender.

(b) The subordination provided for in this Agreement is intended to be a full and complete subordination of the lien of Second Lender to the lien of Lender, and Second Lender agrees to take any further actions necessary to effectuate such subordination.

2. No Modification of Loan Documents

Nothing in this Agreement shall be construed as a modification of the terms and conditions of the Loan Documents, and the rights and remedies of Lender under the Loan Documents shall remain in full force and effect.

3. Notice

In the event of a default by Borrower under the terms of the Loan Documents, Second Lender agrees to provide prompt notice to Lender of such default.

4. Miscellaneous

4.1 Representations & Warranties

4.1.1 Both sides are confident and committed to upholding the requirements stated in this Agreement, ensuring that all necessary authority is granted.

4.1.2 Both Parties agree that this Agreement is consistent with any prior commitments or agreements they may have established with external parties.

4.1.3 Both Parties vow to abide by all applicable laws, regulations, and orders while executing this Agreement.

4.1.4 Both parties attest and guarantee that all information presented in this Agreement or any related documents executing this Agreement is entirely accurate and truthful.

4.2 Liability

4.2.1 The Creditor hereby releases, waives, and forever discharges the Borrower from all claims, liabilities, and causes of action of any nature whatsoever (including attorneys' fees and costs) arising out of or related to the exercise by the Borrower of its rights under this Agreement.

4.2.2 The Borrower agrees to fully indemnify and hold harmless the Creditor from any claims, liabilities, or causes of action related to its activities under this Agreement.

4.3 Dispute Resolution

4.3.1 To cultivate a productive and peaceful relationship, both Parties agree to listen to each other's perspectives during conflicts and aim for solutions that benefit everyone involved.

4.3.2 If the dispute escalates, it shall be under (state what the Agreement shall be construed and governed by).

4.4 Severability

4.4.1 To guarantee that the conditions outlined here are fulfilled, any clause not effective or able to be enforced shall be revised to accomplish both Parties' desired outcomes.

4.4.2 The remainder of this Agreement shall remain in full force and effect under its terms.

4.5 Confidentiality

4.5.1 The Parties pledge to guardedly safeguard any information received from one another in correlation with this Agreement, thereby assuring the security of confidential data.

4.5.2 Both parties are legally obliged to maintain all shared information confidential and will only use it with explicit authorization.

4.5.3 Both entities hereby agree to keep all confidential information private unless required by law or necessary for the successful completion of this Agreement.

4.6 Amendment

4.6.1 For this Agreement to be legally valid, all alterations or modifications must be explicitly noted in writing and signed off by each Party.

4.6.2 All verbal changes are not recognized as valid.

4.7 Force Majeure

4.7.1 In the event of force majeure that impedes either Party from completing their contractual responsibilities, this shall not be considered a breach.

4.7.2 Force majeure encompasses various unforeseeable circumstances, from celestial events and pandemics to man-made conflicts and natural disasters such as floods.

4.7.3 During any force majeure event, both parties may be excused from their contractual obligations during these trying times.

4.7.4 After the inevitable circumstances have been addressed, all parties must swiftly and diligently fulfill their commitments.

4.8 Jurisdiction

4.8.1 This Agreement shall be construed and governed by (state what the Agreement shall be construed and governed by).

4.8.2 The Parties agree to submit to (state what the Agreement shall be construed and governed by) for any action or proceeding arising under this Agreement.

4.9 Term and Termination

4.9.1 This Agreement will become valid on (state the date) and remain intact until (state the date).

4.9.2 To terminate this Agreement before it's due, either Party must provide written notice to the other at least (state timeframe) before their desired termination date.

The Parties acknowledge that they have read and understood this Agreement, agreeing to its terms as of (Document.CreatedDate):





Subordination Agreement Template

Used 4,885 times

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