Common use of Ranking and Subordination Clause in Contracts

Ranking and Subordination. The Lender acknowledges that after the date of this Agreement, the Borrower may incur Permitted Financial Indebtedness under limb (d) of such definition and such Permitted Financial Indebtedness may be secured by Permitted Security. The Lender acknowledges and agrees that upon the incurrence of such Permitted Financial Indebtedness and upon request from the Borrower at the request of the creditor under such Permitted Financial Indebtedness, the Lender will be requested to enter into a subordination agreement pursuant to which (a) the Loans under this Agreement will be subordinated to the amounts owing under such Permitted Financial Indebtedness and (b) the Security created pursuant to the Security Documents will rank second in priority to any Permitted Security arising in connection with such Permitted Financial Indebtedness. The Lender agrees, upon the request of the Borrower, to negotiate in good faith and enter into a form of subordination agreement with the Borrower and creditor of such Permitted Financial Indebtedness in form and substance reflecting customary terms to document the subordination contemplated by this paragraph.