Free Subordination Agreement

This Subordination Agreement is made this 20th day of January 2050 (hereinafter "Effective Date"), by and between [Your Name], ("Primary Creditor"), and [Subordinate Creditor Name], ("Primary Creditor"), hereinafter referred to as the "Subordinate Creditor," collectively referred to as the "Parties," to restructure the priority of debt or claims against an asset. The Parties acknowledge and agree that this Agreement shall govern the subordination of the debt owed by the Debtor to the Subordinate Creditor in favor of the debt owed by the Debtor to the Primary Creditor.

1. DEFINITIONS AND INTERPRETATION

In this Agreement, "Debt" shall encompass any financial obligation, including but not limited to principal amounts, accrued interest, fees, expenses, and costs, owed by the Debtor to either the Primary Creditor or the Subordinate Creditor.

The term "Debtor" refers to the entity or individual responsible for fulfilling the obligations under the relevant debt instruments. "Primary Creditor's Debt" signifies the debt owed by the Debtor to the Primary Creditor, while "Subordinate Creditor's Debt" denotes the debt owed by the Debtor to the Subordinate Creditor.

2. SUBORDINATION

2.1 The Subordinate Creditor hereby irrevocably agrees to subordinate and shall cause to be subordinated, the Subordinate Creditor's Debt to the Primary Creditor's Debt.

2.2 This subordination arrangement mandates that the Primary Creditor's Debt shall hold priority and must be paid and satisfied in full before any payments are made toward the Subordinate Creditor's Debt.

2.3 By entering into this Agreement, the Subordinate Creditor expressly waives any right to assert or enforce its claims against the Debtor in priority to the claims of the Primary Creditor.

2.4 The Parties recognize and acknowledge that the subordination of the Subordinate Creditor's Debt to the Primary Creditor's Debt shall remain effective regardless of any changes in the terms of the underlying debt obligations, including but not limited to modifications, extensions, renewals, refinancings, or amendments.

2.5 The Subordinate Creditor agrees to execute any additional documentation as may be reasonably required by the Primary Creditor to evidence and effectuate the subordination contemplated herein, including but not limited to subordination agreements, amendments to existing agreements, and notices to third parties.

3. REFINANCING AND ADDITIONAL LOANS

In the event of refinancing, obtaining additional loans secured by the same collateral, or any restructuring of debt arrangements, the terms of this Subordination Agreement shall remain in full force and effect.

4. PRIORITY OF REPAYMENT

The Subordinate Creditor acknowledges that the Primary Creditor shall have priority over the Subordinate Creditor in the event of liquidation, bankruptcy, or any other insolvency proceeding involving the Debtor.

5. COVENANTS AND WARRANTIES

5.1 The Subordinate Creditor warrants and represents that it has full legal authority to enter into this Agreement and to bind itself to the terms herein.

5.2 Furthermore, the Subordinate Creditor acknowledges that this Agreement is executed for the exclusive benefit of the Primary Creditor and that the Primary Creditor may rely upon the covenants, representations, and warranties made by the Subordinate Creditor herein.

5.3 The Subordinate Creditor agrees to indemnify and hold harmless the Primary Creditor against any loss, liability, or expense arising out of any breach of the representations, warranties, or obligations outlined in this Agreement.

5.4 It is understood and agreed that the Subordinate Creditor shall not take any action that would impair or adversely affect the rights or remedies of the Primary Creditor concerning its Debt obligations, including but not limited to waiving, releasing, or compromising any claims, enforcing any security interests, or entering into any agreements that would subordinate the claims of the Primary Creditor.

5.5 The Subordinate Creditor further covenants to promptly notify the Primary Creditor of any material developments, changes, or events affecting the Subordinate Creditor's Debt or the Debtor's financial condition.

6. CONDITIONS

6.1 Throughout the Term of this Agreement and for three (3) years following its termination, each Party agrees to abide by all applicable laws, rules, and regulations governing their respective rights and obligations under this Agreement.

6.2 Furthermore, each Party shall use its best efforts to ensure compliance with all terms and conditions set forth herein and to promptly notify the other Party of any potential breaches or non-compliance.

7. TERMINATION

This Agreement will commence as of the Effective Date and will continue until the Debt is fully discharged or as may be terminated by either the Primary Creditor or Subordinate Creditor acting reasonably.

8. SIGNATURES

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute the same instrument. This Agreement may be executed and delivered via electronic means, including facsimile and email, with the same effect as if such signatures were original.

IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of the date first above written.

[Your Name]

Primary Creditor

[Date Signed]

[Subordinate Creditor Name]

Subordinate Creditor

[Date Signed]

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