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Real Estate Subordination Agreement
"Need a Real Estate Subordination Agreement for a London office building where ABC Bank (senior lender) is providing £5M additional financing, and XYZ Finance (junior lender) needs to subordinate their existing £2M charge, to be completed by March 2025."
1. Parties: Identification of all parties including Senior Lender, Junior Lender, and Property Owner
2. Background: Context of existing security interests and purpose of subordination
3. Definitions: Key terms including Senior Debt, Junior Debt, Property, Security Documents
4. Subordination Provisions: Core terms establishing priority between security interests
5. Representations and Warranties: Statements of fact and assurances from parties
6. Covenants: Ongoing obligations of parties
7. Enforcement: Rights and procedures for enforcing security interests
1. Standstill Provisions: Terms preventing junior creditor enforcement for specified period. Include when junior creditor rights need to be temporarily suspended
2. Turnover Provisions: Obligations to pay over received amounts to senior creditor. Include when there's risk of incorrect payment order
3. Further Assurance: Obligation to execute additional documents if needed. Include when future documentation might be required
1. Property Description: Detailed legal description of the secured property
2. Existing Security Documents: List and details of all security documents being subordinated
3. Form of Notice: Template for notifying relevant parties of the subordination
4. Permitted Payments: Schedule of payments allowed to junior creditor despite subordination
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