Subordination Agreement (Canada)

Agreement between a debtor and two of its secured creditors whereby one subordinates its security to the other.

For Immediate Download

$14.95 CAD Add to Cart
60-Day Money Back Guarantee
Please select a state

File types included

  • Microsoft Word
  • Adobe PDF
  • WordPerfect
  • Rich Text Format

Compatible with

  • Windows
  • Mac OS X
  • Linux

For Immediate Download

$14.95 CAD Add to Cart
60-Day Money Back Guarantee
Please select a state

Lawyer prepared

Our forms are kept up-to-date and accurate by our lawyers

Unlike other sites, every document on FindLegalForms.com is prepared by a lawyer, so you can be sure that you are getting a form that is accurate and valid in Canada.

Verified in Canada

Our forms are guaranteed
to be valid in Canada

Our team works tirelessly to keep our products current. As the laws change in Canada, so do our forms.

Over 3,500,000
satisfied customers

In over 10 years of creating and selling legal forms, our focus has never changed: providing our customers high quality legal products, low prices and an experience that takes some confusion out of the law.

60-Days Money Back

Try our forms with no risk

If you are unhappy with your form purchase for any reason at all, contact us within 60 days and we will refund 100% of your money back.
This three-party agreement is made among a debtor and two of its secured creditors whereby one creditor subordinates (agrees that the other crediotr willl have priority with regard to the secured asset) its security to the other.

This form includes special formatting features to assist you in completing the agreement.

This form can be used in the following provinces: Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Saskatchewan and Yukon.
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Subordination Agreement
 
THIS AGREEMENT made as of [Date of Agreement (ie. August 1, 2003)] among [Name of Party Subordinating its Security], of [Address of Party Subordinating its Security] (the "Subordinator"), [Name of Party Receiving Benefit of Subordination by Subordinator], of [Address of Party Receiving Benefit of Subordination by Subordinator] (the "Lender") and [Name of Debtor], of [Address of Debtor] (the "Debtor")
 
WHEREAS:
(A)   The Debtor is or will be indebted to the Subordinator in the approximate amount of [Amount of Indebtedness owing by Debtor to Subordinator (ie. $50,000.00)] (such indebtedness together with all other indebtedness of the Debtor to the Subordinator is hereinafter referred to as the "Subordinator's Indebtedness");
(B)   As collateral security for the Subordinator's Indebtedness, the Debtor has granted to the Subordinator the Subordinator's Security against the assets and undertaking of the Debtor (such security together with all other security heretofore or hereafter acquired by the Subordinator from the Debtor in connection with the Subordinator's Indebtedness is hereinafter referred to as the "Subordinator's Security");
(C)   The Debtor is indebted to the Lender in the approximate amount of [Amount of Indebtedness owing by Debtor to Lender (ie. $200,000.00)] (such indebtedness together with all other indebtedness of the Debtor to the Lender is hereinafter referred to as the "Lender's Indebtedness");
(D)   As collateral security for the Lender's Indebtedness, the Debtor has agreed to grant to the Lender a security against the assets and undertaking of the Debtor (such security together with all other security heretofore or hereafter acquired by the Lender from the Debtor in connection with the Lender's Indebtedness is hereinafter referred to as the "Lender's Security");
(E)   As a condition of extending the Lender's Indebtedness, the Lender has required this Agreement to be entered into, and it is in reliance upon this Agreement that the Lender is extending such credit;
NOW THEREFORE in consideration for the foregoing and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Subordinator agrees as follows:
1.   Consent of the Subordinator. The Subordinator consents to the issuance by the Debtor of the Lender's Security in favour of the Lender and the granting of security in its assets thereunder, notwithstanding anything to the contrary contained in any of the Subordinator's Security. The granting of the Lender's Security shall not constitute an event of default within the meaning of the Subordinator's Security that otherwise may have occurred by reason of the Debtor having granted the Lender's Security. Provided however, that no provisions in this Agreement shall affect the rights and security of the Subordinator except as specifically provided herein.
2.   Subordination. The Subordinator hereby agrees with the Lender that the Lender's Security with respect to the undertaking and all property and assets of the Debtor of whatsoever nature or kind, now owned or hereafter acquired, shall rank in priority to the Subordinator's Security, and the Subordinator's Security is hereby postponed and subordinated to and in favour of the Lender's Security to the extent necessary to effectuate the priority ranking referred to above so that irrespective of the actual order of execution, delivery, registration, filing, default or crystallization, the Lender's Security shall rank in priority to the Subordinator's Security as an encumbrance upon the property, assets and undertaking of the Debtor in the same manner and to the same extent as if they had been executed, delivered, registered and/or filed for the purposes of perfecting the security registered thereby and/or crystallized in the order of the respective priority as indicated herein, provided that in the event of failure by the Lender or the Subordinator to properly perfect the Lender's Security or the Subordinator's Security, as the case may be, then the provisions of this Agreement shall not be applicable to such security and the priority of the security remaining unperfected shall be determined in the ordinary course.
3.   Postponement of Payment. From the date hereof and until such time as all indebtedness, obligations and liabilities of the Debtor to the Lender under the Credit Agreement are repaid in full and the Credit Agreement has been terminated:
(a)   the Subordinator shall postpone the payment and satisfaction by the Debtor and its subsidiaries of all indebtedness, liabilities and obligations now or hereafter due and owing by the Debtor and its subsidiaries to the Subordinator including, without limitation, the repayment of loans and the payment of trade accounts, dividends, management fees, rent and interest (the "Subordinated Obligations") in favour of, and shall subordinate the Subordinated Obligations to, all indebtedness, liabilities and obligations of the Debtor and its subsidiaries to the Lender; and
(b)   the Subordinator shall not demand or accept payment of all or any part of the Subordinated Obligations.
 
4.   Filings by Lender. The Subordinator hereby consents to the filing by the Lender of financing change statements or to any similar registrations or filings in any and all appropriate jurisdictions in respect of the postponement and subordination of the Subordinated Obligations provided for above, and the Subordinator shall, upon receipt of a written request from the Lender to do so, undertake such registrations or filing in prescribed form.
5.   Monies Held in Trust. In the event any payments are made by the Debtor or any of its subsidiaries to the Subordinator in contravention of this Agreement, the Subordinator shall hold such payments in trust for the Lender and shall forthwith pay such payments to the Lender.
6.   Extensions, Waivers, Etc. The Subordinator also agrees that the Lender may grant extensions of time, release obligors and/or security, and waive any other rights in relation thereto, without affecting the rights of the Lender nor the obligations of the Subordinator hereunder.
7.   Further Assurances. The Subordinator shall from time to time and at all times hereafter do all things and execute all documents which may be necessary or desirable in order to give full effect to this Agreement.
8.   Costs and Expenses. The priorities described herein shall extend to and include all reasonable costs and expenses incurred by either of the Subordinator or the Lender pursuant to and as authorized by their respective security and shall include without limitation all unpaid interest, costs of collection, attorney fees, consultant's fees and disbursements, receiver's fees and disbursements and agent's fees and disbursements.
9.   Proceeds. The proceeds resulting from the enforcement or realization of any of the Lender's Security and the Subordinator's Security and all other proceeds received by the the Lender or the Subordinator pursuant to their respective security, including without limitation, insurance and expropriation proceeds, will be divided or otherwise dealt with in such ways so as to give effect to the provisions of this Agreement and the priorities created and established hereby.
10.   Disentitlement of Proceeds. Nothing herein contained shall be construed as entitling either the Lender or the Subordinator (collectively the "Creditors") to receive any proceeds from any of the property or assets of the Debtor in respect of which such Creditor does not have any security, in respect of which the security is invalid and unenforceable as against third parties or in respect of which the obligation in respect of which the security stands as continuing collateral security is invalid or unenforceable. If any person shall have a valid claim to proceeds of realization from any of the property or assets of the Debtor in priority to or on a parity with the other Creditor, then this Agreement shall not apply so as to diminish the rights (as such rights would have been but for this Agreement) of the latter Creditor to the proceeds of realization from such property or assets. Nothing contained in this Agreement shall be construed as conferring any rights upon the Debtor or any third party. The priorities provided for in this Agreement shall be effective notwithstanding any matter or thing including, without limitation, the order of any bankruptcy court having jurisdiction as to the entitlement of the Creditors to any proceeds.
11.   Right to Information. Each of the Subordinator and the Lender shall furnish to each other within a reasonable period of time from time to time upon request full information and particulars as to the indebtedness owing by the Debtor to it and as to any events of default which may have occurred under the terms of its security and such other information as may be reasonably requested of it.
12.   Covenant by Debtor. The Debtor hereby acknowledges and consents to the priorities in respect of the interests of the Creditor and the Subordinator as herein set forth and covenants that it will maintain and deal with all of its assets and undertaking in accordance with the terms of this Agreement.
13.   Acknowledgement by Subordinator. The Subordinator acknowledges the benefit to it of the Lender extending credit to the Debtor.
14.   Notices. Any notice required to be served and any payments required to be made hereunder shall be deemed to have been properly served or paid if addressed as follows:
To the Subordinator:
[Address of Subordinator]
Attention:
To the Creditor:
[Address of Creditor]
Attention:
To the Debtor:
[Address of Debtor]
Attention:
Any such notice, may be made by fax or letter or other method of written communication and shall be deemed to have been received, if delivered, on the date of delivery or, if sent by fax or other similar communication, on the business day following transmission and any such payment shall be deemed to have been paid when delivered personally. Any party may change its address for notice or payment at any time by notice given to the other parties hereto pursuant to the provisions of this Agreement.
15.   Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and may not be amended or modified in any respect except by written consent signed by the parties hereto.
16.   Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the  of [Province or State of Lender].
17.   Successors and Assigns. The provisions of this Agreement shall enure to the benefit of and be upon the parties hereto and their respective successors and assigns, provided that the Subordinator shall not assign or transfer any or all of the Subordinator's Security or any of its rights thereunder relating to the undertaking and assets of the Debtor unless and until the proposed assignee or transferee shall have delivered to the other parties hereto a written agreement under seal to be bound by the provisions hereof to the same extent as the Subordinator.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.
 
 
[NAME OF SUBORDINATOR]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
 
 
[NAME OF CREDITOR]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
 
 
[NAME OF DEBTOR]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
Number of Pages7
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#28368
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Subordination Agreement
 
THIS AGREEMENT made as of [Date of Agreement (ie. August 1, 2003)] among [Name of Party Subordinating its Security], of [Address of Party Subordinating its Security] (the "Subordinator"), [Name of Party Receiving Benefit of Subordination by Subordinator], of [Address of Party Receiving Benefit of Subordination by Subordinator] (the "Lender") and [Name of Debtor], of [Address of Debtor] (the "Debtor")
 
WHEREAS:
(A)   The Debtor is or will be indebted to the Subordinator in the approximate amount of [Amount of Indebtedness owing by Debtor to Subordinator (ie. $50,000.00)] (such indebtedness together with all other indebtedness of the Debtor to the Subordinator is hereinafter referred to as the "Subordinator's Indebtedness");
(B)   As collateral security for the Subordinator's Indebtedness, the Debtor has granted to the Subordinator the Subordinator's Security against the assets and undertaking of the Debtor (such security together with all other security heretofore or hereafter acquired by the Subordinator from the Debtor in connection with the Subordinator's Indebtedness is hereinafter referred to as the "Subordinator's Security");
(C)   The Debtor is indebted to the Lender in the approximate amount of [Amount of Indebtedness owing by Debtor to Lender (ie. $200,000.00)] (such indebtedness together with all other indebtedness of the Debtor to the Lender is hereinafter referred to as the "Lender's Indebtedness");
(D)   As collateral security for the Lender's Indebtedness, the Debtor has agreed to grant to the Lender a security against the assets and undertaking of the Debtor (such security together with all other security heretofore or hereafter acquired by the Lender from the Debtor in connection with the Lender's Indebtedness is hereinafter referred to as the "Lender's Security");
(E)   As a condition of extending the Lender's Indebtedness, the Lender has required this Agreement to be entered into, and it is in reliance upon this Agreement that the Lender is extending such credit;
NOW THEREFORE in consideration for the foregoing and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Subordinator agrees as follows:
1.   Consent of the Subordinator. The Subordinator consents to the issuance by the Debtor of the Lender's Security in favour of the Lender and the granting of security in its assets thereunder, notwithstanding anything to the contrary contained in any of the Subordinator's Security. The granting of the Lender's Security shall not constitute an event of default within the meaning of the Subordinator's Security that otherwise may have occurred by reason of the Debtor having granted the Lender's Security. Provided however, that no provisions in this Agreement shall affect the rights and security of the Subordinator except as specifically provided herein.
2.   Subordination. The Subordinator hereby agrees with the Lender that the Lender's Security with respect to the undertaking and all property and assets of the Debtor of whatsoever nature or kind, now owned or hereafter acquired, shall rank in priority to the Subordinator's Security, and the Subordinator's Security is hereby postponed and subordinated to and in favour of the Lender's Security to the extent necessary to effectuate the priority ranking referred to above so that irrespective of the actual order of execution, delivery, registration, filing, default or crystallization, the Lender's Security shall rank in priority to the Subordinator's Security as an encumbrance upon the property, assets and undertaking of the Debtor in the same manner and to the same extent as if they had been executed, delivered, registered and/or filed for the purposes of perfecting the security registered thereby and/or crystallized in the order of the respective priority as indicated herein, provided that in the event of failure by the Lender or the Subordinator to properly perfect the Lender's Security or the Subordinator's Security, as the case may be, then the provisions of this Agreement shall not be applicable to such security and the priority of the security remaining unperfected shall be determined in the ordinary course.
3.   Postponement of Payment. From the date hereof and until such time as all indebtedness, obligations and liabilities of the Debtor to the Lender under the Credit Agreement are repaid in full and the Credit Agreement has been terminated:
(a)   the Subordinator shall postpone the payment and satisfaction by the Debtor and its subsidiaries of all indebtedness, liabilities and obligations now or hereafter due and owing by the Debtor and its subsidiaries to the Subordinator including, without limitation, the repayment of loans and the payment of trade accounts, dividends, management fees, rent and interest (the "Subordinated Obligations") in favour of, and shall subordinate the Subordinated Obligations to, all indebtedness, liabilities and obligations of the Debtor and its subsidiaries to the Lender; and
(b)   the Subordinator shall not demand or accept payment of all or any part of the Subordinated Obligations.
 
4.   Filings by Lender. The Subordinator hereby consents to the filing by the Lender of financing change statements or to any similar registrations or filings in any and all appropriate jurisdictions in respect of the postponement and subordination of the Subordinated Obligations provided for above, and the Subordinator shall, upon receipt of a written request from the Lender to do so, undertake such registrations or filing in prescribed form.
5.   Monies Held in Trust. In the event any payments are made by the Debtor or any of its subsidiaries to the Subordinator in contravention of this Agreement, the Subordinator shall hold such payments in trust for the Lender and shall forthwith pay such payments to the Lender.
6.   Extensions, Waivers, Etc. The Subordinator also agrees that the Lender may grant extensions of time, release obligors and/or security, and waive any other rights in relation thereto, without affecting the rights of the Lender nor the obligations of the Subordinator hereunder.
7.   Further Assurances. The Subordinator shall from time to time and at all times hereafter do all things and execute all documents which may be necessary or desirable in order to give full effect to this Agreement.
8.   Costs and Expenses. The priorities described herein shall extend to and include all reasonable costs and expenses incurred by either of the Subordinator or the Lender pursuant to and as authorized by their respective security and shall include without limitation all unpaid interest, costs of collection, attorney fees, consultant's fees and disbursements, receiver's fees and disbursements and agent's fees and disbursements.
9.   Proceeds. The proceeds resulting from the enforcement or realization of any of the Lender's Security and the Subordinator's Security and all other proceeds received by the the Lender or the Subordinator pursuant to their respective security, including without limitation, insurance and expropriation proceeds, will be divided or otherwise dealt with in such ways so as to give effect to the provisions of this Agreement and the priorities created and established hereby.
10.   Disentitlement of Proceeds. Nothing herein contained shall be construed as entitling either the Lender or the Subordinator (collectively the "Creditors") to receive any proceeds from any of the property or assets of the Debtor in respect of which such Creditor does not have any security, in respect of which the security is invalid and unenforceable as against third parties or in respect of which the obligation in respect of which the security stands as continuing collateral security is invalid or unenforceable. If any person shall have a valid claim to proceeds of realization from any of the property or assets of the Debtor in priority to or on a parity with the other Creditor, then this Agreement shall not apply so as to diminish the rights (as such rights would have been but for this Agreement) of the latter Creditor to the proceeds of realization from such property or assets. Nothing contained in this Agreement shall be construed as conferring any rights upon the Debtor or any third party. The priorities provided for in this Agreement shall be effective notwithstanding any matter or thing including, without limitation, the order of any bankruptcy court having jurisdiction as to the entitlement of the Creditors to any proceeds.
11.   Right to Information. Each of the Subordinator and the Lender shall furnish to each other within a reasonable period of time from time to time upon request full information and particulars as to the indebtedness owing by the Debtor to it and as to any events of default which may have occurred under the terms of its security and such other information as may be reasonably requested of it.
12.   Covenant by Debtor. The Debtor hereby acknowledges and consents to the priorities in respect of the interests of the Creditor and the Subordinator as herein set forth and covenants that it will maintain and deal with all of its assets and undertaking in accordance with the terms of this Agreement.
13.   Acknowledgement by Subordinator. The Subordinator acknowledges the benefit to it of the Lender extending credit to the Debtor.
14.   Notices. Any notice required to be served and any payments required to be made hereunder shall be deemed to have been properly served or paid if addressed as follows:
To the Subordinator:
[Address of Subordinator]
Attention:
To the Creditor:
[Address of Creditor]
Attention:
To the Debtor:
[Address of Debtor]
Attention:
Any such notice, may be made by fax or letter or other method of written communication and shall be deemed to have been received, if delivered, on the date of delivery or, if sent by fax or other similar communication, on the business day following transmission and any such payment shall be deemed to have been paid when delivered personally. Any party may change its address for notice or payment at any time by notice given to the other parties hereto pursuant to the provisions of this Agreement.
15.   Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and may not be amended or modified in any respect except by written consent signed by the parties hereto.
16.   Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the  of [Province or State of Lender].
17.   Successors and Assigns. The provisions of this Agreement shall enure to the benefit of and be upon the parties hereto and their respective successors and assigns, provided that the Subordinator shall not assign or transfer any or all of the Subordinator's Security or any of its rights thereunder relating to the undertaking and assets of the Debtor unless and until the proposed assignee or transferee shall have delivered to the other parties hereto a written agreement under seal to be bound by the provisions hereof to the same extent as the Subordinator.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.
 
 
[NAME OF SUBORDINATOR]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
 
 
[NAME OF CREDITOR]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
 
 
[NAME OF DEBTOR]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
You've found your form, but will you need others? If there are other related forms you may need in the future, it may be beneficial to look at our combo packages. On average, customers who purchase a combo package save 40% on the related forms they need. Take a look at the combo packages below to see if one is right for you.
Canadian Promissory Notes Form Combo Package Get 11 forms for just $44.95 CAD Save 61%! Popular - Save Money with this combo package containing all of our most popular Canadian Promissory Notes Forms

Looking for something else?