subordination agreement

Popular Terms
Formal document acknowledging that one party's claim or interest is inferior (junior) to that of the other party or parties. For example, a firm may agree to let a bank loan take precedence (seniority) over directors' or owners' loans to the firm. If such consent forms a part of a larger agreement, it is called a subordination clause.

Use 'subordination agreement' in a Sentence

The suing party was unable to recover his losses because he had signed a subordination agreement allowing other creditors first right of a claim.
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As an investor, I urge you to accept the subordination agreement which will cause all investors' claims to be considered after back taxes are paid.
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The subordination agreement was not something I was looking forward to and it made me shiver with fear and anticipation.
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