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The Subordinated Creditors Security Agreement is essential in complex financing structures where multiple creditors hold different ranks of priority over the same security. This document is typically used in project finance, corporate restructuring, or syndicated lending scenarios in India where subordinated debt forms part of the capital structure. It ensures compliance with Indian security laws while protecting both senior and subordinated creditors' interests through clear security rights and enforcement procedures. The agreement becomes particularly important in the context of Indian insolvency laws and the SARFAESI Act, as it establishes clear mechanisms for security enforcement and distribution of proceeds. The document includes detailed provisions for creation and perfection of security interests, intercreditor arrangements, and enforcement rights, all tailored to meet specific requirements under Indian law and market practice.

1. Parties: Identifies all parties to the agreement including the borrower, senior creditors, subordinated creditors, and security trustee if applicable

2. Background: Recitals explaining the context of the agreement, existing facilities, and purpose of subordination

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement and rules of interpretation

4. Creation of Security Interest: Provisions detailing the creation and nature of security interests over various assets

5. Ranking and Subordination: Establishes the priority ranking between senior and subordinated creditors and subordination terms

6. Representations and Warranties: Standard and security-specific representations and warranties from the security provider

7. Covenants: Positive and negative obligations of the security provider regarding the secured assets

8. Protection of Security: Provisions for maintaining and protecting the value of the security

9. Enforcement: Rights and procedures for enforcing the security interest upon default

10. Application of Proceeds: Order of application of proceeds from enforcement of security

11. Power of Attorney: Appointment of the security trustee/creditor as attorney for security-related matters

12. Expenses and Indemnity: Provisions for costs, expenses, and indemnification

13. Amendments and Waivers: Procedures for modifying the agreement and effect of waivers

14. Assignments and Transfers: Rules governing transfer of rights and obligations under the agreement

15. Notices: Communication procedures between parties

16. Governing Law and Jurisdiction: Specifies Indian law as governing law and jurisdiction for disputes