Common use of Subordination of Operating Lease Clause in Contracts

Subordination of Operating Lease. (a) The Operating Lease and all right, title and interest of Operating Lessee thereunder and in and to the Property or any portion thereof, if any, are and shall be subject and subordinate to the lien of the Deed of Trust, including, without limitation, any and all fees and reimbursable expenses and other sums payable to Operating Lessee under the Operating Lease. Operating Lessee hereby acknowledges that all provisions of the Operating Lease relating to the application of insurance proceeds and condemnation awards are subject to and junior and inferior to the terms and provisions of the Deed of Trust and the other Loan Documents, and the terms and provisions of the Deed of Trust and the other Loan Documents shall govern and control in the event of any conflict. The Operating Lease shall be considered a Lease (as such term is defined in the Deed of Trust) and subject to all the terms and conditions regarding a Lease contained in the Loan Documents. (b) Operating Lessee agrees that, upon a Foreclosure of the Deed of Trust, provided that the Operating Lease has not expired or otherwise been earlier terminated in accordance with its terms for reasons other than such Foreclosure, Operating Lessee shall attorn to any Subsequent Owner and shall remain bound by all of the terms, covenants and conditions of the Operating Lease, for the balance of the remaining term thereof (and any renewals thereof which may be effected in accordance with the Operating Lease) with the same force and effect as if such Subsequent Owner were the landlord under the Operating Lease and without the payment by such Subsequent Owner of any fees arising from such succession to the interests of Assuming Borrower. Such attornment shall be effective and self-operative as an agreement between Operating Lessee and Subsequent Owner without the execution of any further instruments on the part of any party; provided, however, that at Lender’s request, Operating Lessee shall execute a commercially reasonable instrument confirming such attornment. If any Subsequent Owner shall elect, for any reason whatsoever, to succeed to the interest of Assuming Borrower under the Operating Lease, without terminating the Operating Lease, such Subsequent Owner shall not be (i) liable for any act or omission of any prior landlord (including Assuming Borrower), (ii) subject to any offsets or defenses which Operating Lessee might have against any prior landlord (including Assuming Borrower), or (iii) liable for or bound by any fees, commissions, rent, security deposit, additional rent or other sums or deposits which Operating Lessee might have paid to any prior landlord (including Assuming Borrower). For the purposes of this Agreement, “Foreclosure” shall mean any exercise of the remedies available to the holder of the Deed of Trust, upon a default under the Deed of Trust or other, which results in a transfer of title to or possession of the Property. The term “Foreclosure” shall include, without limitation: (i) a transfer by judicial foreclosure; (ii) a transfer by deed in lieu of foreclosure; (iii) the appointment by a court of a receiver to assume possession of the Property; (iv) a transfer of either ownership or control of either Assuming Borrower or Operating Lessee, by exercise of a stock pledge; (v) a transfer resulting from an order given in a bankruptcy, reorganization, insolvency or similar proceeding; or (vi) any similar judicial or non-judicial exercise of the remedies held by the holder of the Deed of Trust. “Subsequent Owner” shall mean any individual or entity which acquires the fee simple title to or possession of the Property at or through a Foreclosure (together with any successors or assigns thereof), including, without limitation, (i) Lender or its designee, (ii) any purchaser of the Property from Lender, or (iii) any lessee of the Property from Lender (other than Operating Lessee).