A New York Security Interest Subordination Agreement is a legal document that outlines the hierarchy of security interests on a specific asset or property. It is commonly used in commercial transactions when multiple parties have a security interest in the same collateral and need to establish a priority order for repayment in the event of default or bankruptcy. In New York, there are two main types of Security Interest Subordination Agreements: (1) Intercreditor Agreements and (2) Subordination Agreements. 1. Intercreditor Agreement: This type of agreement is typically used when there are multiple lenders involved in providing financing for a borrower. In this scenario, an Intercreditor Agreement is used to determine the priority of repayment between the lenders. It outlines the order in which each lender would receive payment from the borrower's collateral in the event of default, bankruptcy, or other specified events. The agreement may also include provisions regarding voting rights, enforcement actions, and release of collateral. 2. Subordination Agreement: A Subordination Agreement, on the other hand, is used when a party holding a junior or lesser security interest (such as a second lien lender) agrees to subordinate its interest to a party with a higher-ranking security interest (such as a first lien lender). By signing this agreement, the junior lender acknowledges that in the event of default or bankruptcy, it will not attempt to collect on its security interest until the higher-ranking lender has been fully satisfied. Both types of Security Interest Subordination Agreements are commonly seen in commercial lending, real estate financing, asset-based lending, and other business transactions where multiple parties have vested interests in the same collateral or property. They are essential to establish clear priorities and protect the interests of lenders and other involved parties. It is important for parties involved in these agreements to consult legal counsel to ensure compliance with New York law and to properly structure the agreement based on their unique circumstances. Careful drafting and negotiation of the agreement can help avoid conflicts and potential disputes, preserving the rights and priorities of each party involved.