Form 1b.34b Security Interest Subordination Agreement Template printable pdf download

FORM 1B.34b SECURITY INTEREST SUBORDINATION AGREEMENT

This Security Interest Subordination Agreement (“Agreement”) is made and entered into as of __________________,

200___by and between the undersigned ____________________________________________________(“Creditor”), and

_______________________________ (“Debtor”) in favor of _________________________________________ (“Bank”).

To induce Bank to extend credit and other financial accommodations to Debtor now and hereafter, Bank has required the

undersigned Creditor to irrevocably and unconditionally subordinate to Bank all of Creditor’s rights in collateral, in accordance

with the terms of this Agreement.

Collateral. Creditor has or may acquire a security interest in the following described property of Debtor: _______

____________________________________________________________________________________________

____________________________________________________________________________ (the “Collateral”).

Subordination by Creditor. Creditor hereby unconditionally and irrevocably subordinates to the Bank all security

interests, liens, interests and rights (whether consensual or by operation of law) in or against the Collateral. Creditor

agrees that Bank’s security interest, lien and rights to the Collateral are superior to those of Creditor notwithstanding

the date, manner or order of perfection of the security interest, lien or claim of Bank or Creditor, Bank’s failure to

perfect its security interest, or any provisions of any other agreements between Creditor and Bank regarding

Debtor or the Collateral to the contrary.

Modification of Senior Debt. Bank may, at any time and in its sole discretion, substitute, release or permit

alterations to the Collateral; proceed against any or all of the Collateral in whatever order Bank shall determine;

modify, supplement or waive the provisions of the loan documents in any manner; and apply payments and/or

proceeds from the Collateral in any order; in each case without notice to or the consent of Creditor, and without

impairing or affecting any of Bank’s rights under this Agreement or Creditor’s obligations to Bank hereunder.

Default. At any time Creditor fails to comply with any provision applicable to Creditor, Bank may demand

specific performance of this Agreement, whether or not Debtor has complied with this Agreement, or exercise any

other remedy available at law or equity. If any payment on account or, or any Collateral is received by Creditor,

other than as permitted by this Agreement, then such payment or Collateral shall be delivered forthwith to Bank in

the form received, except for the addition or any endorsement or assignment necessary to effect the transfer of all

rights therein to Bank. Bank is irrevocably authorized to supply any required endorsement or assignment which

may have been omitted. Until so delivered, any such payment or Collateral shall be held in trust for Bank and shall

not be commingled with other funds or property of Creditor.

Expenses. Debtor agrees to pay Bank on demand, all expenses of every kind, including all attorneys’ fees, which

Bank may incur in enforcing or protecting any of its rights under this Agreement.

Entire Agreement; Waiver; Successor and Assigns. This Agreement contains the entire agreement of Creditor

with Bank regarding subordination. Any failure by Bank to exercise any right hereunder shall not be construed as

a waiver of the right to exercise the same, and such rights shall be cumulative and not exclusive. Knowledge by

Bank of any breach or other nonobservance by Creditor of the terms of this Agreement will not constitute a waiver

thereof or of any obligations to be performed by Creditor hereunder. This Agreement will be binding upon

Creditor and its successors and assigns.

Applicable Law and Jurisdiction; Interpretation and Modification. This Agreement will be governed by and

interpreted in accordance with the laws of the State of _________________. Invalidity of any provision of this

Agreement will not affect the validity of any other provision. The provisions will not be altered, amended or

waived without the express written consent of Bank. CREDITOR HEREBY CONSENTS TO THE

EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY

OR FEDERAL JURISDICTION OF THE BANK’S BRANCH WHERE THE LOAN WAS ORIGINATED,

AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY

ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE

COLLATERAL OR ANY TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR

INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein shall affect Bank’s rights to serve

process in any manner permitted by law, or limit Bank’s right to bring proceedings against Creditor in the courts

of any other jurisdiction or jurisdictions. This Agreement and any amendments hereto (regardless of when

executed) will be deemed effective and accepted only at Bank’s offices, and only upon Bank’s receipt of the

executed originals thereof.

Waiver of Jury Trial. BANK AND CREDITOR HEREBY JOINTLY AND SEVERALLY WAIVE ANY

AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS

AGREEMENT, THE OBLIGATIONS HEREUNDER OR ANY TRANSACTION ARISING THEREFROM

Form 1b.34b Security Interest Subordination Agreement Template

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