UCC Subordination Agreement

UCC SUBORDINATION AGREEMENT

PRIVATE-BUSINESS RELATIVE-PRIORITY FRAMEWORK

Use gate. Use this form only after counsel identifies the debtor, both
creditors, every affected obligation, the collateral, the governing law for
each issue, and every filing, possession, control, title, or recording step.
Use a tailored agreement for consumer debt, real-property mortgages, fixtures
without a completed fixture analysis, titled vehicles or vessels, aircraft,
rail assets, agricultural liens, intellectual-property filings, deposit or
securities accounts, government or tax liens, purchase-money priority,
cross-border assets, syndicated facilities, or any active insolvency case.

1. Parties and Effective Date

Effective Date: [__/__/____]

Senior Creditor

Legal Name: [________________________________]

Entity Type and Jurisdiction: [________________________________]

Notice Address: [________________________________]

Loan Contact: [________________________________]

Collateral Contact: [________________________________]

Subordinating Creditor

Legal Name: [________________________________]

Entity Type and Jurisdiction: [________________________________]

Notice Address: [________________________________]

Loan Contact: [________________________________]

Collateral Contact: [________________________________]

Debtor

Exact Legal Name: [________________________________]

Former or Alternate Names: [________________________________]

Entity Type: [________________________________]

Jurisdiction of Organization or Principal Residence: [________________]

Organizational Number, if any: [________________________________]

Chief Executive Office: [________________________________]

Each creditor is a “Creditor”; together, the “Creditors.” The debtor signs the
acknowledgments and covenants expressly assigned to it.

2. Transaction Classification

Complete every applicable item before signing:

• ☐ Lien priority only
• ☐ Payment subordination only
• ☐ Lien and payment subordination
• ☐ Enforcement standstill
• ☐ Turnover of specified receipts
• ☐ Senior-debt cap
• ☐ Junior-debt cap
• ☐ Future advances included
• ☐ Revolving commitments included
• ☐ Guaranty obligations included
• ☐ Hedge or cash-management obligations included
• ☐ Equipment or inventory collateral
• ☐ Accounts, instruments, or chattel paper
• ☐ Deposit-account or securities-account collateral
• ☐ Fixtures or other real-property-connected collateral
• ☐ Titled or registered property
• ☐ Intellectual-property-related collateral
• ☐ Proceeds, insurance, claims, or replacements
• ☐ Possession or control arrangement
• ☐ Existing third-party lien or intercreditor agreement
• ☐ Debtor or collateral in more than one jurisdiction
• ☐ Insolvency or bankruptcy provisions requested

Excluded transaction types or collateral: [____________________________]

Required tailored addenda: [________________________________]

Counsel approving classification: [________________________________]

3. Agreement Documents and Precedence

This Agreement includes each checked item:

• ☐ Schedule A — Parties, Credit Documents, and Obligations
• ☐ Schedule B — Collateral and Exclusions
• ☐ Schedule C — Relative Lien Priority
• ☐ Schedule D — Payment Subordination and Permitted Payments
• ☐ Schedule E — Standstill, Enforcement, and Purchase Option
• ☐ Schedule F — Disposition, Release, Proceeds, and Turnover
• ☐ Schedule G — Representations, Insurance, Indemnity, and Liability
• ☐ Schedule H — Governing Law, Filings, Insolvency, and Disputes
• ☐ Signed amendments
• ☐ Acknowledged payoff or release instructions

If documents conflict, the following order controls unless a signed document
expressly identifies the provision it overrides:

1. a court order or mandatory rule for its subject;

2. a signed collateral-specific, control, possession, real-property, title,
   government-lien, or insolvency addendum for its subject;

3. a signed amendment;

4. Schedules A through H for their subjects; and
5. this Agreement.

No financing statement, notice, loan document, portal term, payoff letter, or
course of dealing changes this Agreement unless the required parties sign a
writing identifying the change.

4. Defined Terms

“Collateral” means only the property and proceeds expressly identified in
Schedule B. A category label does not silently add property omitted from that
schedule.

“Junior Debt” means only the obligations identified in Schedule A, subject
to its cap, exclusions, and amendment rules.

“Junior Lien” means the Subordinating Creditor's claimed interest in the
Collateral identified in Schedule B. This definition is not a representation
that the interest attached, was perfected, or has priority against anyone.

“Permitted Junior Payment” means a payment expressly allowed by Schedule D.

“Senior Debt” means only the obligations identified in Schedule A, subject
to its cap, exclusions, and amendment rules.

“Senior Lien” means the Senior Creditor's claimed interest in the Collateral
identified in Schedule B. This definition is not a representation that the
interest attached, was perfected, or has priority against anyone.

“Standstill Period” means the period and trigger stated in Schedule E.

5. Obligations Covered

Schedule A shall identify separately:

• each credit, security, guaranty, hedge, cash-management, reimbursement, and
  other document;

• original and current principal;

• undrawn commitment;

• interest, default interest, fees, expenses, indemnities, and protective
  advances;

• contingent and unmatured obligations;

• termination, maturity, and renewal dates;
• amendments already signed;
• proposed refinancing or replacement treatment; and
• excluded obligations.

Senior Debt cap: ☐ None stated ☐ $[________________________________]

Junior Debt cap: ☐ None stated ☐ $[________________________________]

No obligation is included merely because a document uses “all obligations,”
“related obligations,” or similar shorthand. Schedule A controls this
Agreement's scope.

6. Collateral Scope

Schedule B shall identify the Collateral with enough transaction-specific
detail to reconcile it against the operative security documents, searches,
records, titles, possession, and control arrangements.

For each item or category, state:

• owner or grantor;
• location and jurisdiction;
• description used in each security document;
• identifying number, account, title, record, or schedule;
• whether after-acquired property is intended;
• included and excluded proceeds;
• existing liens and claimants;
• filing, recording, notation, possession, or control evidence;
• release or payoff conditions; and
• whether a specialized addendum is required.

All-assets shorthand selected: ☐ No ☐ Yes, only as expanded in Schedule B

Excluded Collateral: [________________________________]

No Party relies on this Agreement as a financing statement, security agreement,
control agreement, possession receipt, title notation, mortgage, fixture
filing, assignment, or release.

7. Contractual Relative Lien Priority

Subject to Schedule C, the Subordinating Creditor agrees that, as between the
Creditors, its Junior Lien will rank behind the Senior Lien in the identified
Collateral to the extent of the identified Senior Debt.

This agreement:

• allocates rights only among the signing Parties;
• does not create a lien or cure a defective security document;

• does not establish attachment, perfection, filing sufficiency, possession,
  control, or priority against a nonparty;

• does not determine the rights of a buyer, transferee, lien creditor,
  government, account bank, securities intermediary, title authority, trustee,
  receiver, or court; and

• does not extend beyond the Collateral, Senior Debt, and Junior Debt stated in
  the schedules.

Priority structure: [________________________________]

Collateral-specific exceptions: [________________________________]

Effect of Senior Debt above the cap: [________________________________]

Effect of Junior advances after notice: [________________________________]

8. Payment Subordination

Payment subordination applies only if selected in Schedule D.

Select the baseline:

• ☐ No payment subordination
• ☐ Full blockage until the agreed discharge event
• ☐ Blockage only after a defined Senior default and notice
• ☐ Scheduled Permitted Junior Payments continue
• ☐ Other negotiated structure: [________________________________]

Schedule D shall state:

• payment types covered;
• permitted principal, interest, fee, expense, and tax payments;
• default and blockage triggers;
• notice recipients and effective event;
• blockage start, duration, frequency, and end;
• cure, waiver, acceleration, and enforcement effects;
• treatment of noncash payments, setoff, netting, credits, and distributions;
• treatment of mandatory payments and disputed amounts; and
• turnover method and application.

A payment received outside the agreed permissions is handled under Section 12.
No trust, constructive-trust, agency, or fiduciary label applies unless
Schedule D states it after counsel review.

9. Standstill and Enforcement

A standstill applies only if selected and completed in Schedule E.

The restricted actions may include only those checked and defined:

• ☐ accelerate Junior Debt;
• ☐ sue for payment;
• ☐ exercise setoff;
• ☐ take possession or control;
• ☐ direct an account bank, bailee, or intermediary;
• ☐ foreclose, repossess, collect, or dispose of Collateral;
• ☐ attach, levy, garnish, or seek a receiver;
• ☐ commence an involuntary insolvency proceeding; or
• ☐ other: [________________________________].

Schedule E shall state the trigger, notice, duration, extension, maximum
frequency, senior-enforcement condition, cure rights, preservation actions,
proof-of-claim treatment, emergency exceptions, and termination events.

Standstill period: [________________________________]

Actions always permitted: [________________________________]

Actions requiring consent: [________________________________]

Expiration of a standstill does not itself establish that a remedy is available
or that any lien has priority.

10. Amendments, Advances, and Refinancing

Schedule A shall classify each permitted change to the Senior Debt and Junior
Debt, including:

• principal increases and commitment increases;
• protective advances;
• interest-rate and fee changes;
• maturity extensions;
• collateral additions and releases;
• guarantor additions and releases;
• covenant waivers;
• refinancing, replacement, and assignment; and
• changes affecting the debt caps.

Senior changes allowed without Junior consent: [________________________]

Senior changes requiring notice: [________________________________]

Senior changes requiring consent: [________________________________]

Junior changes allowed without Senior consent: [________________________]

Replacement financing conditions: [________________________________]

No future advance or replacement obligation is included beyond the language and
cap completed in Schedule A.

11. Disposition, Release, and Proceeds

Schedule F shall address each voluntary sale, ordinary-course disposition,
foreclosure, acceptance, collection, casualty, condemnation, insurance
payment, settlement, and other realization event relevant to the Collateral.

For each event, state:

• who may authorize or direct it;
• required notice and information;
• whether a Junior Lien release is requested;
• release documents and timing;
• minimum price or process, if any;
• custody and application of proceeds;
• disputed-proceeds procedure;
• surplus handling;
• records and accounting; and
• effect on replacement or acquired property.

A release by the Subordinating Creditor applies only to the Collateral and event
identified in its signed release. This Agreement does not state that any
disposition automatically cuts off a nonparty's interest.

12. Turnover and Misapplied Receipts

If a Creditor receives money or property that Schedule D or F assigns to the
other Creditor, the recipient shall:

1. segregate it to the extent reasonably practicable;
2. notify the other Creditor promptly;
3. preserve available tracing and transfer records;
4. deliver the agreed property or value under written instructions; and
5. receive credit against the obligation identified in the applicable schedule.

Delivery deadline: [________________________________]

Permitted deductions or expenses: [________________________________]

Disputed-receipt escrow or holdback: [________________________________]

The Parties do not use this section to predetermine ownership, trust status,
avoidance, tracing, or court-ordered distribution in an insolvency proceeding.

13. Information, Notices, and Cooperation

Each Creditor shall provide the notices selected in Schedule E or F concerning:

• material default;
• acceleration;
• enforcement;
• proposed disposition or release;
• material amendment;
• assignment or refinancing;
• collateral loss or insurance claim;
• challenge to a lien or filing; and
• insolvency notice.

Information sharing remains subject to privilege, confidentiality, privacy,
bank-secrecy, sanctions, court-order, and third-party restrictions identified
in Schedule G.

No Creditor must disclose another customer's confidential information or waive
privilege. The receiving Creditor shall use shared information only for the
credit and collateral relationship.

14. Possession, Control, and Access

If any Collateral is held by a Creditor, account bank, intermediary, warehouse,
bailee, processor, landlord, title authority, or other third party, Schedule H
shall identify the holder, governing document, instructions, priority
assumptions, release conditions, access, and transition procedure.

This Agreement alone does not give a Party possession, control, access, or
authority over an account, asset, record, or third-party holder.

Required separate agreements: [________________________________]

Custodian or holder contacts: [________________________________]

15. Insolvency and Bankruptcy Scope

Select one:

• ☐ No negotiated insolvency provisions; controlling law and court orders apply
• ☐ A separate counsel-approved insolvency addendum is attached
• ☐ Schedule H contains only the limited provisions identified below

Any insolvency provision must separately address, if applicable, payments,
claims, voting, adequate protection, use or sale of collateral, financing,
credit bidding, releases, plan treatment, marshaling, valuation, turnover,
reinstatement, and jurisdiction.

Nothing in this general form:

• binds a court, trustee, receiver, administrator, or nonparty;
• waives a right that cannot be waived;
• establishes adequate protection or valuation;
• consents to financing, sale, plan, release, or claim treatment; or
• determines whether a payment or transfer can be avoided or recovered.

Limited negotiated insolvency terms, if any: [__________________________]

16. Purchase Option and Cure Rights

A purchase option applies only if completed in Schedule E.

Purchase trigger: [________________________________]

Purchaser: [________________________________]

Obligations and commitments purchased: [________________________________]

Price components and calculation date: [________________________________]

Accrued fees, costs, indemnities, and reserves: [_______________________]

Assignment documents and representations: [____________________________]

Funding deadline and method: [________________________________]

Collateral and control transition: [________________________________]

Cure rights and limits: [________________________________]

No purchase is effective without the required funds, assignment documents,
authority, consents, and transfer steps.

17. Representations and Due Diligence

Each Party makes only the representations checked and completed in Schedule G:

• ☐ authority and authorization;
• ☐ ownership of the identified obligations;
• ☐ current balance and commitment information;
• ☐ no undisclosed assignment or participation;
• ☐ identified defaults;
• ☐ authenticity of delivered copies;
• ☐ lien, filing, possession, or control facts expressly listed;
• ☐ absence of other liens only to the stated knowledge standard; and
• ☐ sanctions, anti-money-laundering, or regulatory status required for the
  transaction.

No representation about attachment, perfection, priority, enforceability,
solvency, or legal conclusion is implied. Each Creditor performs its own legal
and factual diligence.

18. Insurance, Indemnity, and Liability

Schedule G shall state:

• required insurance and evidence;
• loss-payee or additional-insured requests;
• claim-notice and proceeds instructions;
• each indemnified person and covered third-party claim;
• defense, settlement, cooperation, and conflict procedure;
• any liability cap, excluded damage category, and exception;

• fraud, misconduct, confidentiality, data, fees, and enforcement treatment;
  and

• interaction with the credit documents.

• ☐ No contractual indemnity

• ☐ Senior indemnity: [________________________________]
• ☐ Junior indemnity: [________________________________]
• ☐ Debtor indemnity: [________________________________]

Liability cap and exceptions: [________________________________]

19. Term, Discharge, and Reinstatement

Schedule A shall define the event that ends the Senior priority and payment
restrictions, including treatment of commitments, letters of credit, reserves,
contingent claims, indemnities, and clawed-back or returned payments.

Agreed discharge event: [________________________________]

Written discharge notice required from: [________________________________]

Release and record-update deadline: [________________________________]

If a credited payment is later returned or recovered, reinstatement applies
only to the extent and on the conditions stated here after counsel review:
[________________________________].

Provisions intended to continue after discharge: [_________________________]

20. Disputes and General Terms

Schedule H selects:

• governing law for contractual subordination;

• any separate governing law for collateral, filing, control, title, or other
  issues;

• forum, venue, jurisdiction, and service contact;

• escalation and mediation;
• litigation or a separately signed arbitration addendum;
• provisional-relief treatment;
• jury treatment, if any;
• fees and costs;
• notice methods and effective events; and
• limitation periods or claim-notice provisions, if any.

General terms:

• Amendments require a signed writing identifying the change.
• Assignment treatment: [________________________________].
• No waiver arises solely from delay or a single accommodation.
• Severability and reformation use counsel-approved wording.

• Counterparts and electronic process require authenticated authority and
  transaction-appropriate retention.

• No third-party beneficiary is intended except as stated in Schedule G.

• No partnership, agency, fiduciary, or joint venture is created.
• This Agreement and checked schedules are the entire agreement on their
  stated subject.

21. Signatures

Senior Creditor

Legal Name: [________________________________]

By: [________________________________]

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

Subordinating Creditor

Legal Name: [________________________________]

By: [________________________________]

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

Debtor Acknowledgment and Agreement

The Debtor acknowledges receipt and agrees only to the covenants, information,
payment-direction, access, and execution obligations expressly assigned to it.

Legal Name: [________________________________]

By: [________________________________]

Printed Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

Schedule A — Parties, Credit Documents, and Obligations

Senior documents and obligations: [________________________________]

Junior documents and obligations: [________________________________]

Balances and commitments as of: [__/__/____]

Senior Debt cap and exclusions: [________________________________]

Junior Debt cap and exclusions: [________________________________]

Future advances and refinancing: [________________________________]

Schedule B — Collateral and Exclusions

Grantors and owners: [________________________________]

Exact collateral descriptions: [________________________________]

Locations and jurisdictions: [________________________________]

Existing liens and claimants: [________________________________]

Excluded property and proceeds: [________________________________]

Filing, title, possession, and control evidence: [______________________]

Schedule C — Relative Lien Priority

Priority by collateral category: [________________________________]

Exceptions and shared priority: [________________________________]

Cap effects: [________________________________]

Third-party agreement dependencies: [________________________________]

Schedule D — Payment Subordination

Blocked payment types: [________________________________]

Permitted Junior Payments: [________________________________]

Blockage triggers and notice: [________________________________]

Duration and end events: [________________________________]

Turnover and application: [________________________________]

Schedule E — Standstill, Enforcement, and Purchase Option

Restricted actions: [________________________________]

Standstill trigger and duration: [________________________________]

Preservation and emergency exceptions: [________________________________]

Purchase option and cure rights: [________________________________]

Schedule F — Disposition, Release, Proceeds, and Turnover

Disposition and release process: [________________________________]

Notice and consent: [________________________________]

Proceeds waterfall: [________________________________]

Surplus and disputed amounts: [________________________________]

Schedule G — Representations, Insurance, Indemnity, and Liability

Selected representations: [________________________________]

Insurance: [________________________________]

Indemnity: [________________________________]

Liability allocation: [________________________________]

Confidentiality and information sharing: [_____________________________]

Schedule H — Governing Law, Filings, Insolvency, and Disputes

Debtor-location and collateral analysis: [_____________________________]

Governing law by issue: [________________________________]

Searches, filings, recordings, title, possession, and control steps:
[________________________________]

Insolvency addendum: ☐ None ☐ Attached

Forum, dispute process, jury treatment, fees, and notices:
[________________________________]

Completion Gate

• Parties and authority confirmed: ☐ Yes ☐ No
• Credit documents and obligations reconciled: ☐ Yes ☐ No
• Collateral and exclusions reconciled: ☐ Yes ☐ No
• Searches and third-party claims reviewed: ☐ Yes ☐ No
• Filing, title, possession, and control evidence reviewed: ☐ Yes ☐ No
• Lien priority and cap completed: ☐ Yes ☐ No
• Payment subordination completed: ☐ Yes ☐ No
• Standstill and enforcement completed: ☐ Yes ☐ No
• Release, proceeds, and turnover completed: ☐ Yes ☐ No
• Insolvency scope completed or excluded: ☐ Yes ☐ No
• Insurance, indemnity, liability, and disputes completed: ☐ Yes ☐ No
• Counsel in every relevant jurisdiction approved: ☐ Yes ☐ No

Sources and References

No statutory proposition is asserted in this universal private-business form.
The Parties' advisors must identify and insert current official sources for the
selected jurisdiction, collateral, filing method, title or control regime,
third-party claim, insolvency issue, and enforcement path before relying on any
legal conclusion.

End of template.